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Wages, Profitability and Market Structure: Threshold Regression Analyses

Author

Listed:
  • Başak DALGIÇ

    (Hacettepe Üniversitesi)

  • Aytekin GÜVEN

    (İzzet Baysal Üniversitesi)

  • Onur YENİ

    (Hacettepe Üniversitesi)

Abstract

This paper employs threshold regression techniques to examine the effect of product market structure on real wages and profitability. Using longitudinal data on Turkish manufacturing industries over the period of 1985-2001, we show that market concentration has positive effects on wages and profitability. The positive effect of market concentration on wages is only significant over a certain threshold level whereas, the positive effect of market concentration on profitability exists in both regimes determined by a lower threshold level of concentration but weakens over this threshold. Our results suggest that the imperfectly competitive structure of Turkish manufacturing industry offers more monopoly rent to employers than employees.

Suggested Citation

  • Başak DALGIÇ & Aytekin GÜVEN & Onur YENİ, 2013. "Wages, Profitability and Market Structure: Threshold Regression Analyses," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 28(331), pages 33-56.
    • Handle: RePEc:iif:iifjrn:v:28:y:2013:i:331:p:33-56
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    More about this item

    Keywords

    Wages; Profitability; Product Market Structure; Threshold Regression;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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