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Market power in oligopoly: The case of the Ukrainian cement industry

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  • Isayenko Oleksiy
  • Maryanchyk Ivan

Abstract

The object under consideration is the Ukrainian cement industry, which has undergone a serious change in many dimensions, including ownership structure and market structure. We analyze the dynamics of the output market structure and test the hypothesis of a possible collusive behavior introduced by a change in the ownership structure, especially by the big international cement players entering the market. Empirical results point towards intensified competition and reject the hypothesis of the collusion. Unconstrained capacities and dynamic property redistribution make tacit collusion very unstable and demand further optimization of production process. Patterns of interregional trade, exporting behavior and mergers' dynamics pose questions about the validity of the profit-maximizing behavior assumption.

Suggested Citation

  • Isayenko Oleksiy & Maryanchyk Ivan, 2006. "Market power in oligopoly: The case of the Ukrainian cement industry," EERC Working Paper Series 06-06e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:06-06e
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    More about this item

    Keywords

    Ukraine; cement; collusion;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

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