Industrial concentration and price-cost margin in the Indonesian food and beverages sector

Maman Setiawan (1, 2) , Grigorios Emvalomatis (3) , Alfons Oude Lansink (3)

1 Business Economics Group
2 Economics
3 Business Economics

This paper 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 1995-2006. 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. Keywords: industrial concentration, price-cost margin, competition law, food and beverages sector

Mots clés: Social Sciences & Humanities

Domaines: Économie et finance quantitative [q-fin]

Maman Setiawan, Grigorios Emvalomatis, Alfons Oude Lansink. Industrial concentration and price-cost margin in the Indonesian food and beverages sector. Applied Economics, 2011, pp.1. ⟨10.1080/00036846.2011.581220⟩. ⟨hal-00712376⟩