Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/46202
Authors: 
Schiersch, Alexander
Schmidt-Ehmcke, Jens
Year of Publication: 
2010
Series/Report no.: 
DIW Discussion Papers 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

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