| Abstract: | Conclusions In this paper we examined the potential of MNCs to give rise or to promote concentrated markets in a host country. Foreign
presence in the form of MNCs affectsdirectly the market structure of the economy by in-creasing both the relative inequalities in the size distributions of firms (entropy)
and the level of absolute concentration (Herfindahl-CR4). MNCs tend to populate capital intensive sectors and may also account
for a potentialindirect stimulation on the concentration process through their effects on domestic barriers to entry. Industries characterised by
such horizontal FDI are likely to be able to earn and maintain supra-normal profits in the domestic market. However, the effective
curb of competition caused by MNCs did not show uneven distribution of gains in profitability to be present in the market
for a sample of 100 large MNCs and local firms. We should suggest that concentration and other market imperfections may be
the basic factor determining profitability in Greece,not multinationality per se. Moreover, the potential indirect influence of MNCs on domestic barriers may act as an agent for promoting structural changes,
especially in the capital intensive sector. |
