Does Market Structure Matter? New Evidence from Russia

37 Pages Posted: 2 Nov 1998

See all articles by Annette N. Brown

Annette N. Brown

Stockholm School of Economics - Stockholm Institute of Transition Economics (SITE); Centre for Economic Policy Research (CEPR)

J. David Brown

US Census Bureau Center for Economic Studies; IZA Institute of Labor Economics

Date Written: August 1998

Abstract

In this paper we re-examine empirically the Structure-Conduct Performance relationship between concentration and profitability using new data on Russia that allow us to overcome the endogeneity problem of market structure and expand on the traditional analysis in several ways. The analysis yields several important results. We find strong evidence that national concentration does increase profitability, but only in geographically dispersed industries, suggesting that regional markets are an important source of market power for oligopolistic industries. We find preliminary evidence that the effects of market structure are persistent in the long run. And we find for Russia that capital intensity is negatively related to profitability, suggesting that capital-intensive industries face higher adjustment costs and thus are less profitable after recessionary shocks.

JEL Classification: L1, P2

Suggested Citation

Brown, Annette N. and Brown, J. David, Does Market Structure Matter? New Evidence from Russia (August 1998). Available at SSRN: https://ssrn.com/abstract=138448 or http://dx.doi.org/10.2139/ssrn.138448

Annette N. Brown (Contact Author)

Stockholm School of Economics - Stockholm Institute of Transition Economics (SITE)

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Centre for Economic Policy Research (CEPR)

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J. David Brown

US Census Bureau Center for Economic Studies ( email )

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IZA Institute of Labor Economics

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