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Measuring market power in the Greek manufacturing and services industries

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  • Michael L. Polemis

Abstract

This paper investigates the level of market power in the Greek manufacturing and services industry over the period 1970-2007. Based on the Roeger methodology, we investigate the competitive conditions in the examined industries at a disaggregated level (two and three digit ISIC codes). The empirical results indicate that the Greek manufacturing and services industries operate in non-competitive conditions. Moreover, average mark-up ratios are heterogeneous across sectors, with manufacturing having higher mark ups on average than services. In contrast to other related studies, we provide sufficient evidence about the movements of mark-up ratios over time. According to our findings, the mark-up ratios in the manufacturing sectors are, on average, higher in the post European Union (EU) accession period (1982-1992), as a result of the merger wave in the manufacturing industry. However, this upward trend stopped within the period (1993-2007), and the relevant ratios have decreased substantially. The econometric results are quite robust when the Two Stage Least Squares (2SLS) and the bootstrap method are applied. Lastly, the results of our analysis have a number of interesting implications for policy makers and government officials in light of the recent financial crisis that hit Greece.

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  • Michael L. Polemis, 2014. "Measuring market power in the Greek manufacturing and services industries," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(6), pages 742-766, September.
    • Handle: RePEc:taf:irapec:v:28:y:2014:i:6:p:742-766
    DOI: 10.1080/02692171.2014.923386
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    References listed on IDEAS

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    1. Nishimura, Kiyohiko G. & Ohkusa, Yasushi & Ariga, Kenn, 1999. "Estimating the mark-up over marginal cost: a panel analysis of Japanese firms 1971-1994," International Journal of Industrial Organization, Elsevier, vol. 17(8), pages 1077-1111, November.
    2. Dobbelaere, Sabien, 2004. "Estimation of price-cost margins and union bargaining power for Belgian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 22(10), pages 1381-1398, December.
    3. Bresnahan, Timothy F., 1982. "The oligopoly solution concept is identified," Economics Letters, Elsevier, vol. 10(1-2), pages 87-92.
    4. Anthony Rezitis & Maria Kalantzi, 2011. "Investigating Market Structure of the Greek Manufacturing Industry: A Hall-Roeger Approach," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 39(4), pages 383-400, December.
    5. Michael L. Polemis, 2014. "Empirical estimation of market power in Greece," Applied Economics Letters, Taylor & Francis Journals, vol. 21(11), pages 747-750, July.
    6. Michael Polemis, 2012. "Competition and price asymmetries in the Greek oil sector: an empirical analysis on gasoline market," Empirical Economics, Springer, vol. 43(2), pages 789-817, October.
    7. Anthony N. Rezitis & Maria A. Kalantzi, 2013. "Measuring the degree of market power in the Greek manufacturing industry," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(3), pages 339-359, May.
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    Cited by:

    1. Michael L. Polemis & Aikaterina Oikonomou, 2016. "Does regulation affect market power? Evidence from Greek SMEs," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 66(4), pages 43-60, October-D.
    2. Michael Polemis & Panagiotis Fotis, 2016. "Measuring the Magnitude of Significant Market Power in the Manufacturing and Services Industries: A Cross Country Approach," Journal of Industry, Competition and Trade, Springer, vol. 16(1), pages 51-79, March.

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