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

Maman  Setiawan; Grigorios Emvalomatis; Alfons  Oude Lansink

doi:10.1111/asej.12047

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

Maman Setiawan
, Grigorios Emvalomatis
, Alfons Oude Lansink

Research output: Contribution to journal › Article › peer-review

6 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 language	English
Pages (from-to)	61-72
Number of pages	12
Journal	Asian Economic Journal
Volume	29
Issue number	1
DOIs	https://doi.org/10.1111/asej.12047
Publication status	Published - Mar 2015

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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.",

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AB - 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.

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JO - Asian Economic Journal

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

Abstract

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