Industrial concentration and price-cost margin of the indonesian food and beverages sector

Maman Setiawan, Grigorios Emvalomatis, Alfons Oude Lansink

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    14 Citations (Scopus)

    Abstract

    This article investigates trends in industrial concentration and its relationship with the price-cost margin in 54 subsectors of the Indonesian food and beverages sector in the period 1995 to 2006. This study uses firm-level survey data provided by the Indonesian Bureau of Central Statistics (BPS), classified at the five-digit International Standard Industrial Classification (ISIC) Level. The results show a significant increase in industrial concentration in 1995 to 1999, which coincided with the period of the economic crisis in Indonesia. After 1999, the industrial concentration exhibits a slightly decreasing long-term trend. Furthermore, the industrial concentration for all subsectors tends to converge to the same value in the long run. Additionally, results show that higher industrial concentration yields a higher price-cost margin. Finally, the introduction of the competition law in 1999 has slightly lowered industrial concentration and the price-cost margin.
    Original languageEnglish
    Pages (from-to)3805-3814
    Number of pages10
    JournalApplied Economics
    Volume44
    Issue number29
    DOIs
    Publication statusPublished - 1 Oct 2012

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