Investigating the Influence of Firm Characteristics on the Ability to Exercise Market Power - A Stochastic Frontier Analysis Approach with an Application to the Iron Ore Market
Timo Panke and
Heike Wetzel ()
Additional contact information
Timo Panke: Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI), Postal: Vogelsanger Str. 321, 50827 Koeln, Germany, http://www.ewi.uni-koeln.de
No 2014-17, EWI Working Papers from Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)
This paper empirically analyzes the existence of market power in the global iron ore market dur- ing the period 1993-2012 using an innovative Stochastic Frontier Analysis approach introduced by Kumbhakar et al. (2012). In contrast to traditional econometric procedures, this approach allows for the estimation of ﬁrm- and time-speciﬁc Lerner indices and, therefore, the assessment of the inﬂuence of individual ﬁrm characteristics on the ability to generate markups. We ﬁnd that markups on average amount to 20%. Moreover, location and experience are identiﬁed to be the most important determinants of the magnitude of ﬁrm-speciﬁc markups.
Keywords: estimation of market power; Lerner indices; Stochastic Frontier Analysis; non-renewable resources (search for similar items in EconPapers)
JEL-codes: D22 L11 L72 (search for similar items in EconPapers)
Pages: 23 pages
New Economics Papers: this item is included in nep-com and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
https://www.ewi.uni-koeln.de/cms/wp-content/upload ... -characteristics.pdf Full text (application/pdf)
Working Paper: Investigating the influence of firm characteristics on the ability to exercise market power: A stochastic frontier analysis approach with an application to the iron ore market (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ris:ewikln:2014_017
Access Statistics for this paper
More papers in EWI Working Papers from Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI) Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Williams ().