Level Of Market Concentration Research Articles

Industrial innovation and firm performance: A re-conceptualization and exploratory structural equation analysis

Successful new products are essential to the financial viability of many firms, with more than half of most firms' sales resulting from products introduced in the past decade. But despite much research attempting to relate industrial innovation and firm performance, a cohesive theory has yet to emerge. We use structural equation models to assess the simultaneous impact of market structure, firm size and diversification on industrial innovation and firm performance. We measure innovative output by both the number and the nature of resulting new products. In a sample of forty firms in the industrial chemicals industry, we found that (a) innovativeness results in better firm performance; (b) intermediate levels of market concentration result in more innovativeness and better performance than more extreme levels; (c) smaller firms are more innovative and perform better than larger firms, and (d) less diversified firms perform better than highly diversified firms.

On the determination of the critical level of market concentration in education

Although there are many studies in which attempts have been made to determine the effects of market power on the various aspects of market conduct and performance, there are few that test for the existence of a critical level of concentration, and none other than this study that test for such a critical level in the market for education. For the sample and time period, the results of this study suggest that the critical Herfindahl index was 0.50. Those educational markets with an associated Herfindahl index at or above 0.5% can expect, on average, a 1.6 percentage point decrease or 3% reduction in student achievement scores. Policy issues are addressed.

Market Structure And The Adoption Of Innovations: The Case Of The Spanish Banking Sector‡

This paper is an empirical study of the determinants of adoption time for the teleprocess terminal by Spanish commercial and savings banks. The explanatory variables include the characteristics of the adopting firms, size, and in the case of the savings banks, the structure of the market and concentration. The results indicate that the speed of adoption is maximized at intermediate levels of size and market concentration, confirming one theoretical prediction of models of diffusion: namely, that adoption time is minimized at intermediate levels of market concentration.

Organizational Costs, "Sticky Equilibria," and Critical Levels of Concentration

JN the thirty years since Joe Bain's seminal I study (1951), many economists have attempted to determine whether or not there exists a critical level of market concentration at which a discontinuity occurs in the relation between industry concentration and profitability. In this paper we develop and test a more general model, based on organizational costs, which posits the existence of two critical levels of market concentration: one at which an existing cooperative equilibrium will break down as concentration declines, and one at which a cooperative equilibrium will become attainable as concentration increases. We show that the standard model of the critical level of concentration can be regarded as a special case of our more general model, and also that the more general model attains a statistically superior fit. In section II we briefly review some of the previous literature in this area. We develop our model in section III and specify and estimate it in sections IV and V. In sections VI and VII we summarize and interpret our results and present some policy implications of our findings.

Buyer Concentration Ratios

To an overwhelming extent, both theoretical and empirical studies of market competition have focused on the seller's side of the market, while competition among buyers has been virtually ignored.1 Among the few exceptions are the bilateral monopoly model,2 Galbraith's concept of countervailing power,3 and the literature on reciprocity.4 However, with the exception of a recent paper by Lustgarten [I7] there have been no empirical studies of the extent of market power among buyers across industries.5 This paper estimates buyer concentration ratios (BCRs) for 53 manufactured products, using data from the I963 National InputOutput (I-0) Table. That economists should focus on measures of seller concentration is hardly surprising. First, there exists a much more developed body of economic theory and public policy on deviations from pure or 'workable' competition in seller markets, and on the effects of these deviations on resource allocation and 'economic justice'. Also, on average, we might expect concentration to be less among buyers than among sellers, because monopsonization of an input within a geographic region requires both that its use be highly specific, and that the product in which it is used be monopolized within that region. Nevertheless, knowledge of the level of buyer market concentration in manufacturing industries would be useful in assessing a number of economic issues. The first is the extent to which buyer market power exists as a possible interfering factor in resource allocation. Buyer market power might manifest itself in the integration of raw material production and fabricating processes for the purpose of unfairly competing with smaller, independent fabricators,6

A natureza da competencia no mercado de auditoría: unha avaliación da literatura

O elevado nivel de concentración do mercado de auditoría foi aumentando co paso do tempo debido ás sucesivas fusións que tiveron lugar entre as grandes firmas de auditoría. Este feito está suscitando un grande interese e preocupación por parte dos organismos reguladores, dos académicos e dos propios participantes do mercado. Por iso, o obxectivo deste traballo é someter a revisión un amplo conxunto de estudos que pretenderon analizar a natureza da competencia no mercado de auditoría, co fin de poder concluír se o mercado de auditoría actúa baixo as condicións de eficiencia perfecta ou se, pola contra, existe un certo grao de imperfección que posibilite que determinadas firmas exerzan poder de mercado. Finalmente, concluiremos cunha serie de reflexións sobre o mercado de auditoría en España, sinalando en particular que aínda que existen diversos estudos que analizaron a concentración que existe no mercado, ningún deles entrou directamente a analizar en que medida o alto nivel de concentración que se pode percibir en España no segmento das grandes empresas está posibilitando que as firmas multinacionais poidan obter rendas monopolísticas.