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Measurement of the market power of firms: the Japanese case in the 1990s

Author

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  • Kozo Kiyota
  • Takanobu Nakajima
  • Kiyohiko G. Nishimura

Abstract

This article presents a new simple econometric framework for the estimation of individual firms' markup over their marginal cost, taking account of firm heterogeneity, demand-driven cyclical price changes, and the limited availability of firm-level information. The framework is applied to study markup of Japanese firms in manufacturing and wholesale/retail trade for 1994--2002. The results indicate that, on average, the Japanese markets become more competitive in the 1990s than before even in non-manufacturing industries. We also find sizable heterogeneity and non-negligible pro-cyclicality in the markup of the Japanese firms. Copyright 2009 The Author 2009. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Suggested Citation

  • Kozo Kiyota & Takanobu Nakajima & Kiyohiko G. Nishimura, 2009. "Measurement of the market power of firms: the Japanese case in the 1990s," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 18(3), pages 381-414, June.
    • Handle: RePEc:oup:indcch:v:18:y:2009:i:3:p:381-414
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    File URL: http://hdl.handle.net/10.1093/icc/dtp017
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    Citations

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    Cited by:

    1. T.V.S. Ramamohan Rao, 2012. "Firm Specific Monopoly Power in Differentiated Oligopoly," Journal of Quantitative Economics, The Indian Econometric Society, vol. 10(1), pages 85-97, January.
    2. Bellone, Flora & Kiyota, Kozo & Matsuura, Toshiyuki & Musso, Patrick & Nesta, Lionel, 2014. "International productivity gaps and the export status of firms: Evidence from France and Japan," European Economic Review, Elsevier, vol. 70(C), pages 56-74.
    3. NISHIOKA Shuichiro & OKUBO Toshihiro & TANAKA Mari, 2021. "Regional Banking and Plant Survival in Japan," Discussion papers 21021, Research Institute of Economy, Trade and Industry (RIETI).
    4. Kozo Kiyota & Sawako Maruyama, 2018. "On the Demand for Female Workers in Japan: The Role of ICT and Offshoring," Asian Economic Papers, MIT Press, vol. 17(2), pages 25-46, Summer.
    5. Kiyota, Kozo & Maruyama, Sawako, 2017. "ICT, offshoring, and the demand for part-time workers: The case of Japanese manufacturing," Journal of Asian Economics, Elsevier, vol. 48(C), pages 75-86.
    6. repec:hal:spmain:info:hdl:2441/6pua9o9a7l90jbmsrrjb1577vb is not listed on IDEAS
    7. KIYOTA Kozo, 2010. "Productivity, Markup, Scale Economies, and the Business Cycle: Estimates from firm-level panel data in Japan," Discussion papers 10040, Research Institute of Economy, Trade and Industry (RIETI).
    8. Dobbelaere, Sabien & Kiyota, Kozo & Mairesse, Jacques, 2015. "Product and labor market imperfections and scale economies: Micro-evidence on France, Japan and the Netherlands," Journal of Comparative Economics, Elsevier, vol. 43(2), pages 290-322.
    9. Kozo Kiyota, 2023. "Spatially uneven pace of deindustrialisation within a country," The World Economy, Wiley Blackwell, vol. 46(7), pages 2187-2230, July.
    10. Ana Cristina Soares & João Amador, 2012. "Competition in the Portuguese Economy:An overview of classical indicators," Working Papers w201208, Banco de Portugal, Economics and Research Department.
    11. Kazunobu Hayakawa & Toshiyuki Matsuura, . "Dynamic Two-way Relationship between Exporting and Importing: Evidence from Japan," Chapters, in: Chin Hee Hahn & Dionisius A. Narjoko (ed.), Globalization and Performance of Small and Large Firms, chapter 3, pages III-1 - I, Economic Research Institute for ASEAN and East Asia (ERIA).
    12. Ana Cristina Soares & João Amador, 2012. "Competition in the Portuguese Economy: a view on tradables and non-tradables," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    13. repec:spo:wpmain:info:hdl:2441/6pua9o9a7l90jbmsrrjb1577vb is not listed on IDEAS
    14. Pelin Berkmen, 2011. "The Impact of Fiscal Consolidation and Structural Reformson Growth in Japan," IMF Working Papers 2011/013, International Monetary Fund.
    15. Kosuke Aoki & Yoshihiko Hogen & Yojiro Ito & Kenji Kanai & Kosuke Takatomi, 2024. "Determinants of Price Markups at Japanese Firms and Implications for Productivity," Bank of Japan Working Paper Series 24-E-15, Bank of Japan.
    16. NISHIOKA Shuichiro & TANAKA Mari, 2019. "Measuring Markups from Revenue and Total Cost: An Application to Japanese Plant-Product Matched Data," Discussion papers 19018, Research Institute of Economy, Trade and Industry (RIETI).
    17. Carlo Altomonte & Marcella Nicolini & Armando Rungi & Laura Ogliari, 2010. "Assessing the Competitive Behaviour of Firms in the Single Market: A Micro-based Approach," European Economy - Economic Papers 2008 - 2015 409, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.

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