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Survey Of The Industrial Concentration And Price-cost Margin Of The Indonesian Manufacturing Industry

Survey Of The Industrial Concentration And Price-cost Margin Of The Indonesian Manufacturing Industry
Maman Setiawan, Nury Effendi
Universitas Padjadjaran, International Economic Journal, 2016 VOL. 30, NO. 1, 123–146, ISSN: 1016-8737 (Print) 1743-517X (Online) Journal homepage: http://www.tandfonline.com/loi/riej20, http://dx.doi.org/10.1080/10168737.2015.1136666
Bahasa Inggris
Universitas Padjadjaran, International Economic Journal, 2016 VOL. 30, NO. 1, 123–146, ISSN: 1016-8737 (Print) 1743-517X (Online) Journal homepage: http://www.tandfonline.com/loi/riej20, http://dx.doi.org/10.1080/10168737.2015.1136666
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This research investigates trends and conditional convergence of industrial concentration and price-cost margin in 410 subsectors of the Indonesian manufacturing industry. This study uses firm (establishment) level survey data provided by the Indonesian Bureau of Central Statistics (BPS) in the period 1980–2011. The conditional convergence model is employed using four-year intervals. This research finds that the industrial concentration and price-cost margin are relatively high for most of the subsectors. Moreover, the Indonesian manufacturing industry is classified as a tight oligopoly structure. This research also reveals that the industrial concentration and pricecost margin for all subsectors tend to converge to the same value in the long run. The competition law supports the convergence of the industrial concentration and price-cost margin for the subsectors. This research concludes that the higher industrial concentration can create a higher market power in the industry.

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