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title{Does it Pay to be Flexible?

Author

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  • Karl Aiginger
  • Christoph R. Weiss

Abstract

This paper addresses the determinants of price-cost margins in U.S. 4-digit industries. Margins are larger in capital intensive and concentrated industries with high growth rates and R & D and advertising to sales ratios. They also fluctuate significantly over the business cycle. We go beyond the existing literature by considering an issue which is a dominant topic in the business literature, the flexibility of firms to adjust to exogenous shocks. In particular, we find a significant positive relationship between the flexibility of labour demand and price cost margins suggesting that it pays to be flexible.

Suggested Citation

  • Karl Aiginger & Christoph R. Weiss, 1998. "title{Does it Pay to be Flexible?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(5), pages 543-556, October.
    • Handle: RePEc:kap:revind:v:13:y:1998:i:5:p:543-556
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    Cited by:

    1. Gilbert Cette & Rémy Lecat & Ahmed Ould Ahmed Jiddou, 2016. "Margin rate and the cycle: the role of trade openness," Applied Economics, Taylor & Francis Journals, vol. 48(37), pages 3569-3575, August.
    2. Weiss, C.R., 2000. "Determinanten und Zyklik der Profite im produzierenden Ernährungsgewerbe Deutschlands," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 36.
    3. Korner, Julia & Weiss, Christoph R., 2001. "Die Zyklik der Profite in der Ernährungswirtschaft: Ein internationaler Vergleich," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 50(03), pages 1-5.

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