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Survey of the Industrial Concentration and Price-cost Margin of the Indonesian Manufacturing Industry

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  • Maman Setiawan
  • Nury Effendi

Abstract

This research investigates trends and conditional convergence of industrial concentration and price-cost margin in 410 subsectors of the Indonesian manufacturing industry. This study uses firm (establishment) level survey data provided by the Indonesian Bureau of Central Statistics (BPS) in the period 1980--2011. The conditional convergence model is employed using four-year intervals. This research finds that the industrial concentration and price-cost margin are relatively high for most of the subsectors. Moreover, the Indonesian manufacturing industry is classified as a tight oligopoly structure. This research also reveals that the industrial concentration and price-cost margin for all subsectors tend to converge to the same value in the long run. The competition law supports the convergence of the industrial concentration and price-cost margin for the subsectors. This research concludes that the higher industrial concentration can create a higher market power in the industry.

Suggested Citation

  • Maman Setiawan & Nury Effendi, 2016. "Survey of the Industrial Concentration and Price-cost Margin of the Indonesian Manufacturing Industry," International Economic Journal, Taylor & Francis Journals, vol. 30(1), pages 123-146, March.
    • Handle: RePEc:taf:intecj:v:30:y:2016:i:1:p:123-146
    DOI: 10.1080/10168737.2015.1136666
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    Cited by:

    1. Maman Setiawan & Nury Effendi & Rina Indiastuti & Mohamad Fahmi & Budiono, 2022. "Innovation and Dynamic Productivity Growth in the Indonesian Food and Beverage Industry," Resources, MDPI, vol. 11(11), pages 1-13, October.
    2. Maman Setiawan & Grigorios Emvalomatis & Alfons Oude Lansink, 2022. "Dynamics of industrial concentration and technical inefficiency in the Indonesian food and beverage industry," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 734-739, July.
    3. Ariel Herbert Fambeu, 2024. "Export Performance Under Imperfect Competition: Evidence from Manufacturing Firms in Cameroon," Journal of Industry, Competition and Trade, Springer, vol. 24(1), pages 1-18, December.

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