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Measuring the degree of collusive conduct in the Mexican manufacturing sector

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  • Alejandro Castañeda Sabido

    (El Colegio de México)

Abstract

The paper estimates the degree of collusive conduct in the Mexican manufacturing industries by estimating the degree of market power of a representative firm in an industry. Similarly to Hall (1988), the identification assumption for the degree of market power is that total factor productivity growth is not procyclical. To measure the degree of collusive conduct, the paper estimates the market elasticity of demand by exploiting a covariance restriction between demand shocks and productivity shocks, Shapiro (1987). The degree of collusive conduct is obtained by calculating the ratio between the representative firms elasticity of demand and the market elasticity of demand.

Suggested Citation

  • Alejandro Castañeda Sabido, 1998. "Measuring the degree of collusive conduct in the Mexican manufacturing sector," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 13(2), pages 157-169.
    • Handle: RePEc:emx:esteco:v:13:y:1998:i:2:p:157-169
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    File URL: https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/235/237
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    References listed on IDEAS

    as
    1. Domowitz, Ian & Hubbard, R Glenn & Petersen, Bruce C, 1988. "Market Structure and Cyclical Fluctuations in U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 55-66, February.
    2. Matthew D. Shapiro, 1987. "Measuring Market Power in U.S. Industry," Cowles Foundation Discussion Papers 828, Cowles Foundation for Research in Economics, Yale University.
    3. Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057, Elsevier.
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    Cited by:

    1. Jose A. Murillo & Sara G. Castellanos, 2004. "Inflation Dynamics’ Micro Foundations: How Important is Imperfect Competition Really?," Econometric Society 2004 Latin American Meetings 78, Econometric Society.

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