Government and industry performance: a comparative study |
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Authors: | Keith Hartley Richard White David Chaundy |
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Institution: | Centre for Defence Economics , University of York , York , YO1 5DD |
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Abstract: | A number of UK industries are heavily dependent on the government as a major purchaser. The Ministry of Defence and the National Health Service are essentially monopsonists for the industries supplying them. As a monopsonist, government can influence the size, structure, conduct and performance of the industries. This paper examines wheather industries relying heavily on government purchases will differ in their structure, conduct and performance-characteristics and whether dependence on goverment can have favourable or adverse effects on industry performance. The hypothesis is tested by comparing the performance of industries dependent on government purchasing – defence, pharmaceuticals and medical equipment – with a control group of other non-dependent industries. |
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