Price rigidity and industrial concentration: evidence from the Indonesian food and beverages industry

Maman Setiawan, Grigorios Emvalomatis, Alfons Oude Lansink

    Research output: Contribution to journalArticle

    3 Citations (Scopus)

    Abstract

    This paper investigates the relationship between industrial concentration and price rigidity in the Indonesian food and beverages industry. A Cournot model of firm behavior is used in which prices adjust according to a partial adjustment mechanism. The model is applied to panel data of the Indonesian food and beverages industry over the period 1995–2006. The results suggest that industrial concentration has a positive effect on percentage price changes. Furthermore, the speed of price adjustment is higher when the per unit cost of production rises.
    Original languageEnglish
    Pages (from-to)61-72
    Number of pages12
    JournalAsian Economic Journal
    Volume29
    Issue number1
    DOIs
    Publication statusPublished - Mar 2015

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