IDEAS home Printed from https://ideas.repec.org/p/eer/wpalle/03-06e.html
   My bibliography  Save this paper

Market Structure and Profitability in a Transition Economy: Ukrainian Case

Author

Listed:
  • Maryanchyk Ivan

Abstract

How does market power influence profitability? Prior research gives no exact answer. However, theory indicates that the relationship is positive. The aim of this paper is to identify whether and how competition influences profitability in the Ukrainian transition economy. Current study employs linear specifications relating profitability to variables that embody competition factors and industries' specificities. Econometric tests provide evidence that concentration indices have no significant effect on profitability at the nationwide level. Nevertheless, competition possibly matters at the level of regional markets. International trade as a source of competition can be a good disciplinary tool for local producers. The vague nature of the relationship between profitability and concentration may signify that competition is flawed in Ukraine.

Suggested Citation

  • Maryanchyk Ivan, "undated". "Market Structure and Profitability in a Transition Economy: Ukrainian Case," EERC Working Paper Series 03-06e, EERC Research Network, Russia and CIS.
  • Handle: RePEc:eer:wpalle:03-06e
    as

    Download full text from publisher

    File URL: https://eercnetwork.com/default/download/creater/working_papers/file/b3e55d2401a554014d7e2d8dba8bc2e48ca5d49c.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Conyon, M & Machin, Stephen, 1991. "The Determination of Profit Margins in UK Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 39(4), pages 569-582, June.
    2. Clarke, Roger & Davies, Stephen & Waterson, Michael, 1984. "The Profitability-Concentration Relation: Market Power or Efficiency?," Journal of Industrial Economics, Wiley Blackwell, vol. 32(4), pages 435-450, June.
    3. Wendy Carlin & Steven Fries & Mark Schaffer & Paul Seabright, 2001. "Competition and Enterprise Performance in Transition Economies from a Cross-Country Survey," CERT Discussion Papers 0101, Centre for Economic Reform and Transformation, Heriot Watt University.
    4. Demsetz, Harold, 1973. "Industry Structure, Market Rivalry, and Public Policy," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 1-9, April.
    5. Joe S. Bain, 1951. "Relation of Profit Rate to Industry Concentration: American Manufacturing, 1936–1940," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 65(3), pages 293-324.
    6. Gabel, H Landis, 1979. "A Simultaneous Equation Analysis of the Structure and Performance of the United States Petroleum Refining Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 28(1), pages 89-104, September.
    7. Brown, J David & Earle, John, 2000. "Competition And Firm Performance: Lessons From Russia," CEPR Discussion Papers 2444, C.E.P.R. Discussion Papers.
    8. Elhanan Helpman, 1997. "R&D and Productivity: The International Connection," Harvard Institute of Economic Research Working Papers 1798, Harvard - Institute of Economic Research.
    9. Leslie Hannah & J. A. Kay, 1977. "The Measurement of Concentration," Palgrave Macmillan Books, in: Concentration in Modern Industry, chapter 4, pages 41-63, Palgrave Macmillan.
    10. John Earle & Saul Estrin, 2003. "Privatization, Competition, and Budget Constraints: Disciplining Enterprises in Russia," Economic Change and Restructuring, Springer, vol. 36(1), pages 1-22, March.
    11. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
    12. Konings, Jozef & Van Cayseele, Patrick & Warzynski, Frederic, 2001. "The dynamics of industrial mark-ups in two small open economies: does national competition policy matter?," International Journal of Industrial Organization, Elsevier, vol. 19(5), pages 841-859, April.
    13. Jacquemin, Alexis & de Ghellinck, Elisabeth & Huveneers, Christian, 1980. "Concentration and Profitability in a Small Open Economy," Journal of Industrial Economics, Wiley Blackwell, vol. 29(2), pages 131-144, December.
    14. Guth, Louis A, 1971. "Advertising and Market Structure Revisited," Journal of Industrial Economics, Wiley Blackwell, vol. 19(2), pages 179-198, April.
    15. Annette Brown & J. David Brown, 1998. "Does Market Structure Matter?: New Evidence From Russia," William Davidson Institute Working Papers Series 159, William Davidson Institute at the University of Michigan.
    16. Leslie Hannah & J. A. Kay, 1977. "Concentration in Modern Industry," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-02773-6, December.
    17. Manuela Angelucci & Saul Estrin & Jozef Konings & Zbigniew Zolkiewski, 2002. "The Effect of Ownership and Competitive Pressure on Firm Performance in Transition Countries: Micro Evidence from Bulgaria, Romania and Poland," William Davidson Institute Working Papers Series 434, William Davidson Institute at the University of Michigan.
    18. Alan Bevan & Saul Estrin & Mark E. Schaffer, 1999. "Determinants of Enterprise Performance during Transition," CERT Discussion Papers 9903, Centre for Economic Reform and Transformation, Heriot Watt University.
    19. Brown, J David & Earle, John, 2001. "Privatization, Competition and Reform Strategies: Theory and Evidence from Russian Enterprise Panel Data," CEPR Discussion Papers 2758, C.E.P.R. Discussion Papers.
    20. Carlin, Wendy & Fries, Steven & Schaffer, Mark & Seabright, Paul, 2001. "Competition and Enterprise Performance in Transition Economies: Evidence from a Cross-country Survey," CEPR Discussion Papers 2840, C.E.P.R. Discussion Papers.
    21. Kwoka, John E, Jr & White, Lawrence J, 2001. "The New Industrial Organization and Small Business," Small Business Economics, Springer, vol. 16(1), pages 21-30, February.
    22. Konings, Jozef, 1997. "Competition and Firm Performance in Transition Economies: Evidence from Firm Level Surveys in Slovenia, Hungary and Romania," CEPR Discussion Papers 1770, C.E.P.R. Discussion Papers.
    23. repec:lic:licosd:11001 is not listed on IDEAS
    24. Lee, Jaymin, 1986. "Market Performance in an Open Developing Economy: Technical and Allocative Efficiency of Korean Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 35(1), pages 81-96, September.
    25. repec:lic:licosd:11402 is not listed on IDEAS
    26. Chou, Tein-Chen, 1986. "Concentration, Profitability and Trade in a Simultaneous Equation Analysis: The Case of Taiwan," Journal of Industrial Economics, Wiley Blackwell, vol. 34(4), pages 429-443, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Manuela Angelucci & Saul Estrin & Jozef Konings & Zbigniew Zolkiewski, 2002. "The Effect of Ownership and Competitive Pressure on Firm Performance in Transition Countries: Micro Evidence from Bulgaria, Romania and Poland," William Davidson Institute Working Papers Series 434, William Davidson Institute at the University of Michigan.
    2. Estrin, Saul & Konings, Jozef & Angelucci, Manuela & Zólkiewski, Zbigniew, 2001. "The Effect of Ownership and Competitive Pressure on Firm Performance in Transition Countries," CEPR Discussion Papers 2985, C.E.P.R. Discussion Papers.
    3. Jan Hanousek & Ev??en Ko?enda & Jan Svejnar, 2004. "Ownership, Control and Corporate Performance After Large-Scale Privatization," William Davidson Institute Working Papers Series 2004-652, William Davidson Institute at the University of Michigan.
    4. repec:wsr:wpaper:y:2010:i:062 is not listed on IDEAS
    5. Saul Estrin & Alan A. Bevan & Boris Kuznetsov & Mark E. Schaffer & Manuela Angelucci & Julian Fennema & Giovanni Mangiarotti, 2001. "The Determinants of Privatised Enterprise Performance in Russia," William Davidson Institute Working Papers Series 452, William Davidson Institute at the University of Michigan.
    6. Jan Hanousek & Evžen Kočenda & Jan Svejnar, 2007. "Origin and concentration," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15(1), pages 1-31, January.
    7. Jan Svejnar & Evzen Kocenda, 2002. "The Effects of Ownership Forms and Concentration on Firm Performance after Large-Scale Privatization," William Davidson Institute Working Papers Series 471, William Davidson Institute at the University of Michigan.
    8. Andrei Medvedev & Alena Zemplinerová, 2005. "Does Competition Improve Performance? Evidence from the Czech Manufacturing Industries," Prague Economic Papers, Prague University of Economics and Business, vol. 2005(4), pages 317-330.
    9. repec:lic:licosd:10401 is not listed on IDEAS
    10. Ichiro IWASAKI & Satoshi MIZOBATA, 2018. "Post-Privatization Ownership And Firm Performance: A Large Meta-Analysis Of The Transition Literature," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(2), pages 263-322, June.
    11. Saul Estrin & Jan Hanousek & Evzen Kocenda & Jan Svejnar, 2009. "The Effects of Privatization and Ownership in Transition Economies," Journal of Economic Literature, American Economic Association, vol. 47(3), pages 699-728, September.
    12. Asaftei, Gabriel & Parmeter, Christopher F., 2010. "Market power, EU integration and privatization: The case of Romania," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 340-356, September.
    13. Bessonova, Evguenia & Gonchar, Ksenia, 2019. "How the innovation-competition link is shaped by technology distance in a high-barrier catch-up economy," Technovation, Elsevier, vol. 86, pages 15-32.
    14. Edward Nissan & George Carter, 2011. "The Largest Trans-nationals of Developing Economies," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 39(1), pages 71-83, March.
    15. Brown, J David & Earle, John, 2001. "Privatization, Competition and Reform Strategies: Theory and Evidence from Russian Enterprise Panel Data," CEPR Discussion Papers 2758, C.E.P.R. Discussion Papers.
    16. Yang, Qing & Zhang, Lei & Wang, Xin, 2017. "Dynamic analysis on market structure of China's coal industry," Energy Policy, Elsevier, vol. 106(C), pages 498-504.
    17. Jenny-Paola Lis-Gutiérrez, 2013. "Medidas de concentración y estabilidad de mercado. Una aplicación para Excel," Estudios Económicos SIC 10901, Superintendencia de Industria y Comercio.
    18. Bogdan Capraru & Nicoleta-Livia Pintilie, 2017. "Assessing competition in the European Union banking sector," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 9(1), pages 007-026, June.
    19. Kornai, János & Maskin, Eric & Roland, Gérard, 2022. "A puha költségvetési korlát - II [The soft budget constraint II]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 94-132.
    20. J. Kornai & E. Maskin & G. Roland, 2004. "Understanding the Soft Budget Constraint," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 11.
    21. Andreyeva Tatiana, 2003. "Company Performance in Ukraine: What Governs its Success," EERC Working Paper Series 03-01e, EERC Research Network, Russia and CIS.
    22. Leppänen, Simo & Linden, Mikael & Solanko, Laura, 2009. "Firm behavior under production uncertainty : Evidence from Russia," BOFIT Discussion Papers 16/2009, Bank of Finland, Institute for Economies in Transition.

    More about this item

    Keywords

    Ukraine; transition; market structure; concentration; structure conduct performance;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eer:wpalle:03-06e. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anton Pashchenko (email available below). General contact details of provider: http://www.eercnetwork.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.