Development of Competition and the Micro-Level

Mika Maliranta

No 1150, Discussion Papers from The Research Institute of the Finnish Economy

Abstract: The use of traditional industry-level profitability indicators for assessing the state of competition is problematic for two reasons. First, short-term variation reflects business cycles more than it does the impact of competition policy. Second, rough industry-level indicators hide different mechanisms that are dependent on competition but may affect profitability in opposite directions. In this analysis both problems are avoided by using firm-level Financial Statement Statistics of Statistics Finland over the years 1995-2006 and by applying a decomposition method. With these tools the micro-level sources of industry-level profitability changes have been examined over a long-run period. The findings provide support to the general view having emerged from the earlier micro-level analysis that competition has developed in a favorable way in Finland until the end of the 1990s. On the other hand, the results reveal interesting differences between periods, sectors and regions, which describe challenges of competition policy in the future

Keywords: Competition; profitability; measures of competition; micro-structural change (search for similar items in EconPapers)
JEL-codes: D33 D40 L11 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2008
New Economics Papers: this item is included in nep-com
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.etla.fi/wp-content/uploads/2012/09/dp1150.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rif:dpaper:1150

Ordering information: This working paper can be ordered from
https://www.etla.fi/en/publications/dp1150-en/

The price is 10€.

Access Statistics for this paper

More papers in Discussion Papers from The Research Institute of the Finnish Economy Contact information at EDIRC.
Bibliographic data for series maintained by Kaija Hyvönen-Rajecki ().