Imperfect Market Structure Research Articles

The role of imperfect market structure in the employment effect of emissions trading scheme in China: A theoretical extension and empirical investigation

The Chinese government aims to balance employment stabilization and emissions reduction when it initiates an emissions trading scheme (ETS) to control carbon emissions. However, the policymakers should not neglect the role of imperfectly competitive market structure and market power from incumbent firms. In view of this, classical framework of Berman and Bui's (2001) is extended in this paper to clarify the theoretical mechanism of employment effect of the ETS considering firm-level market power. In addition, based on the firm-level panel data from 2008 to 2019 of China, the employment effect of each pilot ETS is measured with the method of difference-in-difference-in-differences. Then a moderating effect model is established to verify the role of firm-level market power on the heterogeneous employment effect among the pilot ETSs. Moreover, the employment effect is further decomposed to evaluate the influential mechanism from the perspective of firms’ strategic behavior. It is found that there is negative employment effect of China's ETS policy, due to the significant moderating role of firm-level market power. This decrease in labor demand is mainly dominated by a negative output effect rather than a positive substitution effect because strategic allowance sellers with stronger market power tend to hire fewer employees to reduce carbon emissions by controlling production scale. However, the heterogeneity of policy effects resulted by market structure is also identified in different pilot regions. Employment dividend has been found in Beijing and Tianjin where strategic allowance buyers manipulate the carbon market and hire more employees to consolidate their market power. Therefore, policymakers should improve the design of the ETS to overcome the adverse employment effect duo to the region-specific market structure.

Commercial Use of Non-Timber Forest Products: Can the Poor Really Get Benefits?

Although the markets for NTFP is increasing, local harvesters have not been able to reap fair benefits. This is mainly because of non-conducive policy environment, imperfect market structure and complex socio-economic system that weakens the position of local communities in NTFP business. Citing the cases and figures of income disparity from NTFP trade in western Nepal, theauthor contends that policy is the overarching factor responsible for the situation. Any move to improve the situation should start from policy and provision of market and social services capable of elevating the position of local communities’bargaining power and share of benefits.

Analysis of Industrial Sector Competitiveness of Pakistan: An Application of Panzar-Rosse (PR-H) Statistic

This study utilizes the Panzar-Rosse (1978) PR-H Statistics framework to examine the competitiveness of Pakistan's industrial sector. Leveraging data from the Pakistan Stock Exchange (PSX) covering the period from 2007 to 2020 and focusing on insights from the 200 largest listed companies, our study sheds light on the complex market dynamics and competitive forces at play in the sector. By applying the Panzar-Rosse PH Statistic, we aim to demonstrate the presence of a competitive market structure that helps mitigate monopolistic tendencies. Our analysis, while managing endogeneity and employing the Generalized Method of Moments, reveals that the industrial sector in Pakistan is characterized by significant market dynamics that influence business behavior and performance. Despite this, the results of the PR-H Statistics suggest a relatively competitive market environment prevailing in Pakistan's industrial sector. However, there are indications of non-competitive behaviors attributed to weak institutional quality and the overall economic conditions of the country. Additionally, tendencies of weak and imperfect market structures are prevalent, compounded by undocumented and informal economic activities. Through this investigation, we aim to deepen understanding of the competitive landscape in Pakistan's industrial sector and its implications for industrial agents. By highlighting the challenges posed by non-competitive behaviors and weak market structures, our study offers valuable insights into the broader economic ecosystem of Pakistan.

THE MAIN EQUIPMENT BUSINESS OF WEAPON SYSTEMS (ALUTSISTA) IN DEFENSE: MARKET STRUCTURE AND COMPANY MERGER

Defense procurement is basically a strategic and sensitive issue. This involves detailed information regarding the national defense capacity and capability that other countries may not know as much as possible. This study aims to describe the business of the main weapon system (alutsista) in defense related to how the defense industry cycles, the character of the defense industry, market structure and company mergers. The approach in this study uses a descriptive approach, while the type of research is descriptive qualitative research. The defense industry, like any industry, undergoes a process of growth to mature. The defense industry has various characteristics that indicate its identification in terms of the defense economy. The market structure related to the practice of the defense industry is more emphasized on the imperfect market structure. In the defense industry, monopoly, oligopoly, and competitive markets are heavily influenced by internal and external factors of the company. In the commercial defense industry, there is an intention to combine two or more companies to minimize costs or maximize profits. Another reason for the merger of the two companies can also be related to the factors of production, and the specific objectives of the company.

Evaluation of Systematic Monetary Influences in Pakistan’s Perspective

Traditional macroeconomic theories establish relationship among certain macroeconomic variables based on assumptions of perfect competition and resulting flexible prices. Theories based on these assumptions might not hold for developing economies due to imperfect market structure and fragile financial institutions. This study attempts to analyze the quantity theory of money (QTM) and Phillips curve (PC) relationship from long-run perspective for economy of Pakistan. QTM relates complete absorption of money growth effect into inflation, and PC establishes negative relationship between inflation and unemployment. In the long-run, money is assumed to have only inflationary or nominal effect. Therefore, presence of any long-run tradeoff between inflation and unemployment, once inflations is a pure monetary phenomenon in the long-run, cast serious doubts regarding long-run neutrality of money. Autoregressive distributed lag (ARDL) modelling approach is opted to analyze long-run impact of money growth on inflation, and long-run effect of inflation on unemployment. The long-run relationship between inflation and unemployment is statistically insignificant for economy of Pakistan. Furthermore, results of this study show that inflation, even in the long-run, does not adjust as theorized in QTM.

Grade 12 Learners’ Perceptions of Opportunities to Learn Imperfect Market Structures: Frances Baard District

This empirical study sought to investigate the grade 12 economics learners’ perceptions of opportunities to learn imperfect market structures in selected schools in the Francis Baard District of Northern Cape. A quantitative research approach was employed, where a questionnaire was administered to 253 Grade 12 economics learners from three schools in Galeshewe. The questionnaire was based on four Opportunities to Learn (OTL) variables; content exposure, content emphasis, quality of instruction, and instructional resources. Data were analysed through excel 365 and then through SPSS. Overall, the study showed that little or no opportunities to learn were being created for learners to master the concept of imperfect market structures. This study is significant because it helps to make known to both the learners and teachers, the factors influencing learners’ learning outcomes related to imperfect market structures. Learners must also be encouraged to exhibit a positive attitude towards the subject, while the economics teachers should put in the required effort to improve the learning outcomes in schools.

Fruit marketing, its efficiency and supply chain constraints in India: A case study

Study investigated the agribusiness opportunities, marketing channels and marketing efficiency of different supply chain systems for two important fruit crops kinnow and aonla (Indian gooseberry) in Rajasthan. Two districts, viz. Sriganganagar and Jaipur, having highest area under cultivation of these crops in the state, were purposively selected. Information was collected from 120 farmers, 30 wholesalers (traders/Contractors) and 30 retailers during the year 2009-2011 for both the crops. Further 25% of sample households were again revisited during 2019-20 to find changes in marketing of these selected fruit crops. The producers' share in consumer's rupee was 32% and 28% for kinnow and aonla, respectively. The marketing efficiency index in dominant channel was 0.48 in kinnow and 0.38 in aonla. The most common and important constraint in marketing of fruits was cartelisation among traders. The imperfect market structure forces the farmers to enter into a forward contract that sets a minimum price, rather at the dissatisfaction of the farmer, as an insurance against possible lower price at later stages. Establishment of multi-fruit processing units in production area, development of infrastructure at major market centres, and establishing export value chain for kinnow and necessary support/incentives for orchard management for timely disposal of kinnow fruits are suggested as strategies to improve the marketing efficiency.

Investigating Opportunities to Learn Mathematical and Graphing Skills in Imperfect Market Structures

The concept of imperfect market structures enables learners to develop mathematical and graphing skills that are needed for them to be critical thinkers and to be able to solve problems faced in their daily lives. It also provides opportunities for learners to acquire economic knowledge, which enables them to make informed economic decisions on economic events and issues they will experience as they enter the world of business and work. In spite of the importance of imperfect market structures in cultivating these skills and knowledge, learner academic achievement in economics, particularly where mathematical and graphing skills are concerned, has been regrettably poor in most countries around the globe. Hence, this qualitative study investigated the opportunities to learn mathematical and graphical skills in imperfect market structures in three selected Grade 12 economics classes. The study intended to investigate what it is that teachers do in the name of teaching and learning of mathematical and graphing skills and the reasoning behind their actions. Opportunities to Learn (OTL) is the conceptual framework which was used to determine what teachers do in the classroom that enables learners to make sense of imperfect market structures. Using the case study approach, the study was operationalised by three conveniently selected economics teachers in the Galeshewe township in South Africa. The researcher conducted semi-structured interviews with each of the three teachers before they conducted their classes which the researcher observed. The findings of the researcher show that little or no opportunities to learn are provided in an imperfect market structure class.

Delta Eyaleti, Asaba'da Seçilmiş Odun Dışı Orman Ürünlerinin Pazarlanması

Aim of study: Non-timber forest products have diverse benefits to man and the environment. Hence, this study was carried out to provide information on the types of NWFPs sold, marketing channel, structure, performance and challenges faced by marketing of selected NWFPs.
 Area of study: This study was conducted in Asaba, Delta State.
 Material and methods: Simple random sampling was used to select 105 respondents from five major markets in Asaba using structured questionnaire. Descriptive statistics (frequency count, percentage, means, charts), costs and return, likert scale and chi square analysis were the analytical tools used. 
 Main results: Females were the major participants in the markets for NWFPs. Varieties of species were sold with various marketing participants and routes. These routes ensure the delivery of the NWFPs to the end users. An imperfect market structure exists for most of the selected NWFPs except for Aldabrachelys gigantean with a good profit margin. Of the selected NWFPs, Aldabrachelys gigantean and Chrysophyllum albidum were the most profitable with an index of 0.97 kobo (US$0.00027) and 0.89 kobo (US$0.00029) respectively for every ₦1 ($0.003) investment. 
 Highlights: The markets for NWFPs were faced with numerous constraints amongst them were high price fluctuation and perishability of the products. The implication is that most of these NWFPs when not quickly sold out are subjected to degradation which leads to their eventual disposal and wastage of natural resources. To combat these constraints, good storage and processing facility should be made available for storing NWFPs to ensure their availability in all seasons and to limit wastage.

European Green Deal and transport sector development – opportunities or restrictions

The study is focused on the possibilities and restrictions for the development of the transport sector of EU member-states with GDP per head significantly lower than the EU average levels, because of the introduction of the European Green Deal. For the purposes of the research, there are used the methods of quantitative and qualitative analysis, as well as statistical analysis. In the publication, it is examined also the status quo of the European transport system in accordance with the provisions of the European Green Deal and the European policies for the development of the transport sector till 2030 and 2050. Special attention is paid to the energy dependence of the transport modes on fossil fuels, as well as the level of digitalization of the transport sector, the obstacles for operation of sustainable multimodal transportation services and the danger of imperfect market structures emergence in the field of transport in the less developed regions in EU.

CHALLENGES OF THE COMPETITION POLICY IN SERBIA AND OTHER WESTERN BALKAN COUNTRIES

Free and undisturbed competition, in terms of competing among the market participants to gain as much share as possible, is one of the cornerstones of the efficient functioning of a market economy, all with the aim of increasing social welfare. Due to the emergence and increase of numerous market anomalies, the market of perfect (complete) competition remains only a theoretically viable concept, while imperfect market structures and unequal market relations form are an economic reality. The market in some countries is developed as much as the competition. A competition must be encouraged and even protected with mechanisms and standards that are appropriate to the market economy. In this way the competition encourages an increase of market players performanses. In the process of accession of Serbia and other Western Balkan countries to the European Union one of the most sensitive and most complex economic problems is just related to the construction of a modern market structure. It is certain that the attitude towards the market and the development of competition should have a crucial role in the future economic development and the inclusion of these countries in trends on the single European market. In this sense it is a developed legal regulation which, on the one hand, encourages and helps to strengthen the competitiveness of enterprises in domestic and foreign markets, and on the other hand, with very rigorous sanctions discouraged and suppressing the creation of monopolies, effectively prevents all forms of distortion of competition, monopolistic tendencies (agreements), abuse of the dominant position in the market. The inherent aspiration to restrict competition in any way requires the establishment of an adequate legal and institutional framework. Forming an effective antitrust policy is a conditio sine qua non for the smooth operation of the "invisible hand" in the field of competition protection. Experience shows that in the transition countries the most complex issue is related to the construction of a competetive market structure in a function of ensuring an intense and effective competition between economic entities. Antitrust legislation is therefore particularly important in small open economies that are in pressure of globalization and local state and private monopolies. Among these countries are the Western Balkan states, which are the subject of the research of authors in this paper. Experience shows, and the current practice in Serbia fully confirm that just in the domain of creating the competitive market conditions show considerable resistance. Paper points out the shortcomings and the possible increase in the degree of efficiency of antitrust legislation in the Western Balkan countries.

The Wage Premium and Market Structure

In this paper, we seek to understand why the “wage premium”, the percentage by which wages earned by skilled workers exceed those of unskilled workers, varies among industries featuring different market competitiveness. We construct a theoretical model with CES utility function and constant return to scale production function that allows us to examine the effects of different imperfect market structures (monopolistic competition and oligopoly) on the wage premium. We find that the wage premium is higher under oligopoly than under monopolistic competition. Our findings are supported by empirical evidence from Chilean manufacturers.

¿Concentración sin poder de mercado? Un caso de estudio aplicado al sector fabricación de colchones en el Ecuador

La presente investigación tiene como objetivo establecer la estructura de mercado de la industria de fabricación de colchones en el Ecuador y las relaciones que presentan las variables concentración, precios del mercado local, tipo de cambio y rentabilidad. Se utiliza un modelo de regresión de ecuaciones simultáneas de mínimos cuadrados en tres etapas (MC3E) con información de las empresas con mayor cuota de mercado del sector. La concentración de mercado se calcula utilizando el índice Herfindahl – Hirschman. Los principales resultados exhiben que existe una estructura de mercado imperfecta y que la cuota de mercado incide en la rentabilidad del oligopolio. El oligopolio a su vez no ejerce poder de mercado, por la competitividad en precios de los colchones importados.

Imperfect market, emissions trading scheme, and technology adoption: A case study of an energy-intensive sector

It is widely accepted that the firms included in an emissions trading scheme (ETS) come mostly from oligopolistic industries. The “exclusionary manipulation” of these heterogeneous emitters can distort both output and permit markets and lead to differences in abatement technology adoption. We studied the impacts of asymmetric firms' market power on the diffusion of abatement technologies. A model for technology adoption among heterogeneous firms has been established, which takes into account diversity in production capacity and the integration of firms' strategic behaviour in both the carbon permit and the output markets. Our model reveals that, considering the direct and strategic effects in adoption benefits, firms' production capacity can directly determine their sequence order of adoption, and their market power can accelerate the diffusion of a new abatement technology. A case study of an energy-intensive sector in China is illustrated to support the conclusions derived from the model and help policymakers better understand the diffusion of abatement technologies under imperfect market structure.

¿Son rentables las empresas concentradas? El caso del sector de curtido de pieles en el Ecuador

El presente trabajo de investigación identifica la estructura de mercado del sector Curtido y Adobo de Pieles en el Ecuador CIIU: C151101 y tiene como objetivo establecer la relación entre rentabilidad, costos y concentración de mercado. Se calculó el índice de Herfindhal-Hirshman utilizado para casos de estructura de mercado imperfecta; y por otro lado, los índices de solvencia, liquidez, rentabilidad, para evaluar el desempeño financiero de las empresas concentradas. Además, se diseñaron cuatro modelos econométricos a los cuales se aplicaron pruebas estadísticas de idoneidad de los estimadores. Se aplicó análisis de regresión lineal simple y múltiple en varias experimentaciones a través de Mínimos cuadrados Ordinarios. De las nueve empresas del oligopolio, se identificaron cuatro empresas concentradas que controlan el 73,12% del mercado, con un margen de rentabilidad del 0,1391 promedio del oligopolio para el período de estudio 2011-2015. De los modelos econométricos desarrollados uno permitió evidenciar a través de la prueba estadística de Fisher que la concentración de mercado y los costos de producción inciden en la rentabilidad con un p-value de 0,00035, es decir, existe una relación lineal significativa de la rentabilidad del oligopolio con los costos de producción y la concentración del mercado, demostrándose así que este grupo de empresas obtienen beneficios por efecto de su capacidad para concentrar el mercado.

Evaluation of the impact of market deformations on the competitive environment of the housing investment market

The paper is devoted to the problem of assessing the impact of market deformations on the competitive environment of the housing investment market. The main types of deformations inherent to the market under study and negatively affecting the development of favorable competitive environment have been identified and analyzed. The strongest factor influencing the competitive environment is the imperfect market structure constraining the development of favorable competitive environment and leading to imbalance in the economic interests of developers, housing consumers and public authorities.

ANALISIS PEMASARAN DAN DISTRIBUSI IKAN NILA SEGAR (Oreochromis niloticus) DI PASAR BAUNTUNG BANJARBARU PROVINSI KALIMANTAN SELATAN

The purpose of this study was to find out differences in marketing margin of tilapia and the factors that influence it, to know the structure, behavior and appearance of tilapia fish market, to know the benefits received by tilapia traders in Banjarbaru, and analyze the strategies and policies of the local government towards the system that has been running. The research was started from October 2014 until December 2014. The research location was determined intentionally (purposive), i.e. Bauntung Market Banjarbaru, South Kalimantan. It was intended to know prices and marketing costs at the retailer level. The results showed that the analysis of marketing margins of the value of marketing margin was relatively constant/was not much different. Based on F test of all the factors that influenced the marketing margin, they were free variable volume of marketing (X1), transportation costs (X4), cost of sales (X5) and profit of traders (X6), with 99% confidence level, it was found that there was no real effect on the marketing margin of tilapia. While the selling price (X2), the purchasing price (X3) at 99% confidence level really influenced the marketing margin of tilapia in Banjarbaru. The analysis of market integration indicated that I () = 0867, which means that market integration was not perfectly integrated yet. This means that the marketing of tilapia in Bauntung Market Banjarbaru was in imperfect competitive market structure. The value of relationship of price changes amounted to 0.87 (r ≠ 1). This means that the relationship of price changes in traders level and the price change in retailers level were not strong (not perfect). The elasticity value of price transmission (ET) was low. The transmission elasticity was <1, the value was 0.763. This means that the price elasticity inelastic or in other words the market is not efficient. The benefits gained by retailers was in average Rp. 2.213,88-/kg.

Risks in global natural gas markets: Investment, hedging and trade

Recent supply security concerns in Europe have revived interest into the natural gas market. We investigate infrastructure investment and trade in an imperfect market structure for various possible risks for both supply and demand. We focus on three possible scenarios in a stochastic global gas market model: (i) transit of Russian gas via Ukraine that may be disrupted from 2020 on; (ii) natural gas intensity of electricity generation in OECD countries that may lead to higher or lower natural gas demand after 2025; and (iii) availability of shale gas around the globe after 2030. We illustrate how the timing of investments is affected by inter-temporal hedging behavior of market agents, such as when LNG capacity provides ex-ante flexibility or an ex-post fallback option if domestic or nearby pipeline supply sources are low. Moreover, we find that investment in LNG capacities is more determined by demand side pull – due to higher needs in electric power generation – than by supply side push, e.g. higher shale gas supplies needing an outlet. We focus on Europe, North America, and China that are the world's most important gas consuming and supplying regions.

The structure of Ontario's higher education market

Similar to many other institutions in a market economy, colleges and universities operate in their own 'marketplace'. The purpose of this paper is to provide analysis of the structure of Ontario's higher education market that is dominated by publicly funded universities. The theoretical framework for this paper is based on the theories of perfect and imperfect competition market structures. Analysis in this paper shows that Ontario's higher education market has some features of a monopolistic competition market. The paper also shows that other market structures (e.g., perfect competition, monopoly, oligopoly, and monopsony) do not represent Ontario's higher education market. While this market structure might not be consistent with the profit maximisation feature in a monopolistic competition market, analysis shows that it is consistent with other features. The combination of competition (many suppliers or institutions) and monopoly (product differentiation) can be seen in the market of higher education in Ontario.

Banking deregulation and allocative efficiency in Pakistan

ABSTRACTThis article examines the impact of deregulation policies on allocative efficiency of banks in Pakistan. It investigates whether deregulation has impacted the pattern of allocative efficiency of banks and explores which bank ownership segment has been more responsive. It uses data from 1991 to 2005 and explicitly models allocative inefficiency by using the translog shadow cost-share system. Empirical results show that overregulation and imperfect market structure hampers the ability of banks to make competitive decisions. We find evidence of allocative inefficiency leading to over-utilization of labour and deposits vis-à-vis operating cost. Empirical results for time-varying allocative efficiency show declining levels of allocative inefficiency for state-owned and private banks in post-reform period. Deregulation policies induce state-owned banks to decrease over-utilization of labour relative to deposits and operating cost while private banks succeed in using operating cost closer to optimal levels. Hence, policymakers have latitude to introduce more reforms without jeopardizing allocative efficiency.