MEASURING MARKET POWER FOR SOME INDUSTRIAL SECTORS IN AUSTRIA

Citation
K. Aiginger et al., MEASURING MARKET POWER FOR SOME INDUSTRIAL SECTORS IN AUSTRIA, Applied economics, 27(4), 1995, pp. 369-376
Citations number
12
Categorie Soggetti
Economics
Journal title
ISSN journal
00036846
Volume
27
Issue
4
Year of publication
1995
Pages
369 - 376
Database
ISI
SICI code
0003-6846(1995)27:4<369:MMPFSI>2.0.ZU;2-6
Abstract
This paper applies an oligopoly model which parameterizes the degree o f market power for two industrial sectors (glass industry, non-electri cal machinery) in Austria. In contrast all other papers in the New Emp irical Industrial Organization literature we account for the non-stati onarity characteristics of the data series. A dynamic specification pr ocedure which assumes structural long-run equilibrium relationships is therefore applied. Since a simultaneous system with non-linear cross- equation restrictions is implied by the economic model, a full informa tion maximum likelihood method is used. The data reveal a higher degre e of market power for the glass industry than for non-electrical machi nery; this hierarchy is in line with the position of these industries for concentration rates and Herfindahl indices.