Survey of the Industrial Concentration and Price-cost Margin of the Indonesian Manufacturing Industry

This research investigates trends and conditional convergence of industrial concentration and price-cost margin in 410 subsectors of the Indonesian manufacturing industry. This study uses firm (establishment) level survey data provided by the Indonesian Bureau of Central Statistics (BPS) in the period 1980–2011. The conditional convergence model is employed using four-year intervals. This research finds that the industrial concentration and price-cost margin are relatively high for most of the subsectors. Moreover, the Indonesian manufacturing industry is classified as a tight oligopoly structure. This research also reveals that the industrial concentration and price-cost margin for all subsectors tend to converge to the same value in the long run. The competition law supports the convergence of the industrial concentration and price-cost margin for the subsectors. This research concludes that the higher industrial concentration can create a higher market power in the industry.     

Structure, conduct, and performance: evidence from the Indonesian food and beverages industry

This article employs the Structure–Conduct–Performance (SCP) paradigm to investigate the simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin in the Indonesian food and beverages industry. This research extends the SCP framework by including price rigidity and technical efficiency as additional key variables. The results suggest that there is a simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin with a positive bi-directional relationship between industrial concentration and price-cost margin. These findings imply that an appropriate course of action for the regulator in this highly concentrated industry is to reduce industrial concentration in order to increase competition, reduce upward price flexibility, and increase technical efficiency in the long run.     

Dynamic productivity growth and its determinants in the Indonesian food and beverages industry

ABSTRACT

This research investigates dynamic productivity growth and its determinants in the Indonesian food and beverages industry decomposing dynamic productivity growth into the contributions of dynamic technical inefficiency change, dynamic technical change, and dynamic scale inefficiency change. The empirical application employs unbalanced panel data of 44 subsectors in the Indonesian food and beverages industry over 1990–2014. To estimate dynamic productivity growth, this research uses a Luenberger indicator accounting for the presence of adjustment costs. The results show that dynamic productivity growth exhibits a decreasing trend. Dynamic technical inefficiency change and dynamic scale inefficiency change contribute positively to dynamic productivity growth, while dynamic technical change contributes negatively. Dynamic productivity growth is affected by the change in industrial concentration, the growth rate of capital intensity, the growth rate of exports, the growth rate of foreign direct investment, and location.     

Conjectural variation elasticities and concentration

This paper shows that measures of seller concentration can be interpreted as weighted averages of conjectural variation elasticities. This interpretation allows an assessment of the appropriateness of a wide variety of concentration measures for price-cost margin studies.     

Industry margins and the business cycle: Some new microeconomic evidence

Analysis of margin flexibility is an important item on the research agendas in macroeconomics and industrial economics. Using a new panel data set for U.S. manufacturing industries, we offer new evidence on the cyclical sensitivity of price-cost margins and on the concentration-margins debate in industrial organization.     

Conjectural variations,risk aversion and price-cost margins

Summary We have shown that introduction of random conjectural variations and risk aversion into an oligopoly model leads to results in line with those derived earlier for competitive and monopolistic firms. In particular, a risk-averse firm has smaller output and higher expected price-cost margin than a risk-neutral firm. For a specific form of conjectural variations we have shown that under risk aversion the firm-level expected price-cost margins depend on the market structure, measured in terms of the Herfindahl index of the rest of the firms in the industry, as well as on the expected degree of correlation between the competitors' reactions.     

考虑技术进步和结构变化的宏观能源回弹效应估算

考虑到技术进步和结构变化引致的宏观能源回弹效应影响广泛但相关研究不足，本文使用多部门增长核算法和LMDI指数分解法，分别对技术进步和结构变化引致的能源回弹效应构建估算模型，进而估算我国2005年—2019年含6个细分部门的整体经济和含18个细分部门的工业能源回弹效应。研究显示，在整体经济和工业层面，技术进步引致的能源回弹效应在研究期内一直存在，结构变化引致的能源回弹效应仅在部分年份存在。近年来，工业结构变化呈现如下趋势：即仅促进了经济增长却没有促进能耗强度下降。本文的研究可为进一步完善能源效率政策提供重要参考。     

Profitability,concentration, imports and exports: the case of Taiwan's midstream petrochemical industries

Based on an open-economy oligopoly model, causalities among domestic firms’ price-cost margin (PCM), domestic concentration, import and export shares are derived and a simultaneous-equation system is established. By utilizing the 1989–1997 data of Taiwan's midstream petrochemical industries, three-stage least squares is used to estimate the system. The empirical results confirm the derived results, and demonstrate: (1) there exist simultaneous relationships among domestic PCM, domestic concentration, import and export shares; (2) import concentration affects domestic concentration positively, but affects domestic PCM, import and export shares negatively; (3) diversifying international markets improves domestic firms’ PCM; (4) domestic firms seem to be in a situation of collusion.     

The effects of agglomeration economies on technical efficiency of manufacturing firms: evidence from Indonesia

This article examines the effects of agglomeration economies and industrial structure upon firm-level technical efficiency in the Indonesian manufacturing industry over the period 2004–2009. A stochastic production frontier and three channels of agglomeration economies consisting of specialization, diversity and competition are used. The empirical results show that the effects of specialization and diversity upon firm-level technical efficiency are positive and negative, respectively, indicating that specialization is more favourable than diversity for stimulating firms’ technical efficiency. Competition has a positive sign, showing that region with high levels of competition tend to be more conducive in accelerating firm-level technical efficiency. In terms of firm location, both dummy for urban region and industrial complex turn out to be positive, indicating that firms located in both areas are experienced higher technical efficiency. Both firm size and age also have positive effect upon technical efficiency.     

基于LMDI模型的工业碳排放影响因素研究——以无锡市为例

在估算2001～2010年无锡市工业分行业碳排放的基础上,基于改进的迪氏对数平均权重分解法,建立工业部门碳排放影响因素的分解模型。研究发现:工业经济规模效应和工业部门内部结构效应分别对工业碳排放起到显著的促进和抑制作用;工业能源结构变化对工业碳排放影响较小;代表节能环保技术水平的能源强度效应减缓了工业碳排放,但其抑制作用不稳定,能源利用效率仍有较大的提升空间。最后提出了相应的减排政策建议。     

The effect of exchange rates on prices,wages, and profits: A case study of the United Kingdom in the 1990s

Abstract

During the 1990s the United Kingdom experienced large and sudden exchange rate movements that had no apparent impact on overall consumer prices. This paper shows that the stability of UK consumer prices was made possible in part by offsetting movements in the price-cost margins of foreign exporters and in part by offsetting price-cost margins in the UK distribution sector. At the same time, UK manufacturers experienced margin swings in the opposite direction, largely due to their role as exporters. Thus, sterling depreciation boosted the profits of UK manufacturers and squeezed the profits of UK distributors, while sterling appreciation had the opposite effects.     

Wage premium in the state sector and state‐owned enterprises: Econometric evidence from a transition country in times of austerity

This paper investigates the differences in the wage premium and compliance with the wage cut introduced in Serbia at the end of 2014, between two subsectors of the public sector: the state sector and state‐owned enterprises. Results show that before the austerity measures were introduced, the conditional wage premium was, on average, higher in state‐owned enterprises than in the state sector, with significant differences from the median to the top of the wage distribution. After the austerity measures were introduced, the wage differences between the subsectors deepened, due to lower compliance of state‐owned enterprises with the wage cut.     

我国商业银行净利差的影响因素及分类研究

本文利用我国21家商业银行1999—2007年的数据,检验了我国商业银行净利差的影响因素,并具体分析了国有银行、股份银行和城市商业银行净利差的决定因素。结果表明,我国商业银行净利差的影响因素包括违约风险、利率风险、流动性水平、风险厌恶程度、暗含利息支付、非利息储备的机会成本、管理质量、市场份额和政策因素,2004年央行改革对国有银行和股份制银行净利差有显著影响。最后,本文针对政策、战略等方面对各类商业银行提出了建议。     

贸易开放、不完全竞争与成本加成——基于中国制造业数据的实证分析

文章利用中国制造行业的面板数据,分析贸易开放对我国国内行业成本加成的影响。回归结果表明,市场竞争与国际贸易是影响我国制造行业成本加成的重要因素。进口贸易在高竞争性行业对成本加成具有正向的促进效应,而在低竞争性行业具有相反的效应;出口贸易对国内行业的成本加成具有显著的正向促进效应。     

Agglomeration economies in the finnish manufacturing sector

Regional concentration of population and economic activity is a common phenomenon both in Finland and the other most developed countries, which refers to the existence of agglomeration economies. Two types of economies are usually recognized to be important: specialization (Marshall externalities) and diversity (Jacobs externalities) economies. The former refer to the geographical concentration of a specific industry and the latter to the industrial diversity of the local system. This study examines the relationship between agglomeration economies and regional productivity in the manufacturing sector in Finland. A distinction is made between the effects of urbanization and localization economies. The production function method is applied to the manufacturing sub-sectors in the 83 NUTS 4-level regions in 1995 and 1999. The results support the regional specialization more than diversification even if some differences can be seen between the manufacturing sub-sectors.     

Economic integration and the dynamics of firms’ competitive behavior

We investigate the evolution of firms’ competitive behavior in the EU by studying the dynamics of firms’ price-cost margins (PCMs) across four countries (France, Italy, Poland and Sweden), in three manufacturing and three services industries for around 170,000 firms over the period 1999–2007. By looking at density distributions of the PCM across firms, we detect an aggregation problem affecting country specific measures of PCM levels, with PCM changes providing instead an unbiased representation of industry dynamics. A Laspeyres-type decomposition of PCM changes shows pro-competitive effects over the period, induced mainly by the reallocation channel, and a tendency to a quality upgrading of firms, revealed by the positive interaction term. These trends are stronger after 2002. We also observe a trend towards lower PCMs across manufacturing industries, while the latter is not true for services. These findings are confirmed by a dynamic panel econometric exercise performed on the pooled firm-level sample.     

New products and market competition

Using a novel data set on new product introductions in U.S. manufacturing, the paper studies the relationship between new product introductions and the intensity of market competition as it is measured by industry-specific price-cost margins. New product introductions intensify market competition and depress price-cost margins. These results draw significant empirical support from a sample of five U.S. manufacturing industries. A 10 percent increase in the number of new product introductions causes price-cost margins to drop by approximately 0.5 percent. Although price-cost margins appear procyclical with respect to fluctuations in industry sales, new products make price-cost margins less procyclical and therefore, the intensity of market competition more procyclical.The author would like to thank the Board of Research at Babson College for their generous financial support. The author would also like to thank Jane Cloran for assisting with some of the data. All of the remaining errors are the responsibility of the author.     

中国工业的技术选择与技术进步:1985-2003

本文对1985—2003年来中国工业行业的技术选择做了评估,用DEA法计算期间工业行业的技术进步(TFP)及其分解项技术变化与技术效率,对技术选择与技术进步的关系进行理论梳理和实证检验。我们发现和论证了:(1)中国工业部门在1991—1995和1999—2003年间两度有重化工业化趋势,在1993—1998年间发生了加速资本深化,1999年后,资本深化逐年趋缓。不同产权类型的资本产出比、劳动生产率和资本生产率存在很大差异;(2)工业行业在1990—1993年和1999—2003年有明显的技术进步,两个期间的技术进步主要分别归因于技术效率和技术变化;(3)国企比例或垄断程度高的行业在技术变化方面表现突出,但技术效率的退化程度令人堪忧,而竞争性强的行业技术效率改善明显,但技术变化方面表现不佳;(4)中国工业行业的技术选择(资本深化)对技术变化具有Granger促进作用(反之不成立),但技术变化不是期间技术进步的主要方面,以至于资本深化与技术进步间并不存在统计上的稳定关系。     

异质性企业、结构转型与稳定出口

通过构建异质性企业、结构转型和出口增长的二元边际理论模型,本文认为转型国家出口增长主要沿集约边际实现的原因与其农业剩余劳动力有关,农业剩余劳动力越多,出口增长的集约边际越大、扩展边际越小。利用Tobit模型对1995-2009年中国出口到123个国家的HS-6位码贸易数据进行实证分析,在控制其他影响因素的前提下,我国农业剩余劳动力非农转移显著正向影响出口增长集约边际、负向影响扩展边际的效应确实存在。经济规模、贸易成本、人民币升值、区域经济一体化、外部冲击、语言的相通性、政治体制等变量对中国出口增长二元边际的影响机制不完全相同,表明要提高出口增长中的扩展边际比重,出口企业应实施市场多元化战略,将目标市场从传统高收入国家转移到发展中国家来,实现出口的稳定增长。     

On the Simultaneity Between Market Concentration and Profitability: the case of a Small-Open Developing Country

The objective of this paper is to examining the controversy in the literature, surrounding the simultaneity between concentration and price-cost margins. As earlier studies have tested this problem in the context of developed countries only, this paper examines the relationship between concentration and profitability using data from a developing country, Malaysia. Empirical results indicate that simultaneity between concentration and margins may be ruled out in the case of Malaysian manufacturing industries. [L19]