TESTING THE COMPETITIVE ENVIRONMENT AND THE PERSISTENCE OF PROFITS HYPOTHESES

In the present paper I examine Brozen's (1970, 1971a, b, c, 1982) Comp etitive Environment Hypothesis and Mueller's (1977) Persistence of Pro fits Hypothesis in the Creek manufacturing industries between 1958 and 1984. The analysis reveals a positive (market power) association betw een past and current price-cost margins, although a considerable scram bling in the ranks of price-cost margins takes place over time. A high concentration and high barriers to entry sub-sample of markets examin ed, showed a general reduction in concentration, barriers to entry and a mobility in price-cost margins ranks, indicating that disciplinary competitive forces are also at work within manufacturing markets.