Tuesday, May 28, 2013

Market Power and Industrial Performance in Pakistan

Posted by D. Daniel Sokol

Akbar Ullah (Pakistan Institute of Development Economics, Islamabad), Ejaz Ghani (Pakistan Institute of Development Economics, Islamabad) and Attiya Y. Javed (Pakistan Institute of Development Economics, Islamabad) explore Market Power and Industrial Performance in Pakistan.

ABSTRACT: Using a panel of eight Pakistani manufacturing industries, we have examined the changes in price-cost margin (gross profitability) during 1998- 2009. In this study the traditional industrial organization approach of Structure- Performance has been applied to analyse the effects of concentration and import intensity on price-cost margins. It has been found that market concentration measured by four-firm concentration leads to high price-cost margin. Imports have the tendency to make the domestic firms more competitive, but their effect on more-concentrated firms is smaller as compared to non-concentrated firms. The minimum efficient scale and assets of industry have positive effects on margins while capital intensity has been found to reduce gross profitability.

https://lawprofessors.typepad.com/antitrustprof_blog/2013/05/market-power-and-industrial-performance-in-pakistan-.html

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