TY - JOUR
T1 - Structure, conduct, and performance
T2 - evidence from the Indonesian food and beverages industry
AU - Setiawan, Maman
AU - Emvalomatis, Grigorios
AU - Oude Lansink, Alfons
PY - 2012/1/1
Y1 - 2012/1/1
N2 - This article employs the Structure-Conduct-Performance (SCP) paradigm to investigate the simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin in the Indonesian food and beverages industry. This research extends the SCP framework by including price rigidity and technical efficiency as additional key variables. The results suggest that there is a simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin with a positive bi-directional relationship between industrial concentration and price-cost margin. These findings imply that an appropriate course of action for the regulator in this highly concentrated industry is to reduce industrial concentration in order to increase competition, reduce upward price flexibility, and increase technical efficiency in the long run.
AB - This article employs the Structure-Conduct-Performance (SCP) paradigm to investigate the simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin in the Indonesian food and beverages industry. This research extends the SCP framework by including price rigidity and technical efficiency as additional key variables. The results suggest that there is a simultaneous relationship between industrial concentration, price rigidity, technical efficiency, and price-cost margin with a positive bi-directional relationship between industrial concentration and price-cost margin. These findings imply that an appropriate course of action for the regulator in this highly concentrated industry is to reduce industrial concentration in order to increase competition, reduce upward price flexibility, and increase technical efficiency in the long run.
UR - http://www.scopus.com/inward/record.url?scp=84868241841&partnerID=8YFLogxK
U2 - 10.1007/s00181-012-0648-3
DO - 10.1007/s00181-012-0648-3
M3 - Article
SN - 0377-7332
SP - 1
EP - 17
JO - Empirical Economics
JF - Empirical Economics
ER -