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http://hdl.handle.net/10419/46202
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| Title: | | Empiricism meets theory: Is the Boone-Indicator applicable?  |
| Authors: | | Schiersch, Alexander Schmidt-Ehmcke, Jens |
| Issue Date: | | 2010 |
| Series/Report no.: | | Discussion papers // German Institute for Economic Research 1030 |
| Abstract: | | Boone (2008a) proposes a new competition measure based on Relative Profit Differences (RPD) with superior theoretical properties. However, the empirical applicability and robust-ness of the Boone-Indicator is still unknown. This paper aims to address that question. Using a rich, newly built, data set for German manufacturing enterprises, we test the empirical valid-ity of the Boone-Indicator using cartel cases. Our analysis reveals that the traditional regres-sion approach of the indicator fails to correctly indicate competition. A proposed augmented indicator based on RPDs performs better. The traditional Lerner-Index is still the only meas-ure that correctly indicates the expected competitive changes. |
| Subjects: | | Competition Boone-Indicator Cartels Census Data |
| JEL: | | L12 L41 D43 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des DIW DIW-Diskussionspapiere
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