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The Response by the Norwegian Aluminium Industry to Changing Market Structure

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Abstract

This paper analyses how changes in market structure have affected the margins (measured by the Lerner index) of Norwegian aluminium plants. Instead of showing the expected negative trend, due to increased competition internationally, the margins are found to move procyclically around a constant that significantly exceeds zero. Three explanations for this stability in the levels of the margins are identified; a better exploitation of scale economies, increased productivity and product specialisation which allows Norwegian producer prices to increase more rapidly than the international reference price.

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  • Kjersti-Gro Lindquist, 1998. "The Response by the Norwegian Aluminium Industry to Changing Market Structure," Discussion Papers 237, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:237
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    References listed on IDEAS

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    Cited by:

    1. Bjørn E. Naug, 1999. "Modelling the Demand for Imports and Domestic Output," Discussion Papers 243, Statistics Norway, Research Department.

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    More about this item

    Keywords

    Lerner index; Translog cost function; Aluminium industry; Differentiated products;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

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