Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74917
Authors: 
Konings, Jozef
Van Cayseele, Patrick
Warzynski, Frederic
Year of Publication: 
2001
Series/Report no.: 
LICOS Discussion Paper 110
Abstract: 
In this paper, we analyze the effects of trade, concentration and ownership on the pricing behavior of firms in two transition countries, Bulgaria and Romania. We use an extensive dataset of more than 3000 firms and sector level infirmation to estimate the effects of these three factors on the price cost margin (PCM) for the period 1994-1998. We find: 1) that trade disciplines the industry in concentrated industries; 2) that high concentration is associated with more market power; 3) that private and foreign owned firms heve higher PCMs. This indicates that the pricing strategy of private firms is inherently differentthan the one of State firms, either as the results of different objectives or induced by the abuse of market power.
Subjects: 
market power
price cost margin
trade
competition
ownership
transition
JEL: 
L1
L33
P3
Document Type: 
Working Paper

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