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Lerner Index. Estimation and the Impact of its Market Structure Determinants

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  • Alejandro Castañeda Sabido

    (El Colegio de México)

Abstract

Using the reasoning that assumes that a pro-cyclical Solow residual is an indication of the presence of market power, the paper estimates the Lerner index. At the same time in which we estimate the Lerner index, we measure the impact of industry structure variables (concentration and imports) on this index. Because we have panel data, we also allow for a change in the impact of these variables across time. For the whole manufacturing sector, we find that concentration and imports have a differing impact on the Lerner index across the business cycle. We find evidence that shows that the Lerner index behaves anticyclically. And we also make the analysis by type of good (durables and non-durables) and find differing impacts of concentration and imports by type of good.

Suggested Citation

  • Alejandro Castañeda Sabido, 2006. "Lerner Index. Estimation and the Impact of its Market Structure Determinants," Economía Mexicana NUEVA ÉPOCA, CIDE, División de Economía, vol. 0(2), pages 165-197, July-Dece.
    • Handle: RePEc:emc:ecomex:v:15:y:2006:i:2:p:165-197
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    References listed on IDEAS

    as
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    4. Paul A. GEROSKI & Alexis Jacquemin, 1981. "Imports as a Competitive Discipline," Discussion Papers (REL - Recherches Economiques de Louvain) 1981031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    5. Pugel, Thomas A, 1980. "Foreign Trade and US Market Performance," Journal of Industrial Economics, Wiley Blackwell, vol. 29(2), pages 119-129, December.
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    More about this item

    Keywords

    Lerner index estimation; concentration; import-penetration; pro-cyclical Solow residual;
    All these keywords.

    JEL classification:

    • L00 - Industrial Organization - - General - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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