The Effects of Privatization and Competitive Pressure on Firms' Price-Cost Margins: Micro Evidence from Emerging Economies

Konings, Jozef ORCID: 0000-0003-1280-4674, Cayseele, Patrick Van and Warzynski, Frederic (2005) The Effects of Privatization and Competitive Pressure on Firms' Price-Cost Margins: Micro Evidence from Emerging Economies. Review of Economics and Statistics, 87 (1). pp. 124-134. ISSN 0034-6535, 1530-9142

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Abstract

This paper uses representative panel data on 1,701 Bulgarian and 2,047 Romanian manufacturing firms to analyze how price-cost margins are affected by privatization and competitive pressure. Privatization is associated with higher price-cost margins. This effect is stronger in highly competitive sectors, which suggests that the creation of competitive markets and privatization go together. It also suggests that privatized firms reduce costs rather than increase prices, as in highly competitive markets firms are more likely pricetakers. Import penetration is associated with lower price-cost margins in sectors where product market concentration is high, but in more competitive sectors this effect is reversed.

Item Type:	Article
Uncontrolled Keywords:	38 Economics, 3801 Applied Economics, 35 Commerce, Management, Tourism and Services, 3507 Strategy, Management and Organisational Behaviour
Depositing User:	Symplectic Admin
Date Deposited:	06 Nov 2018 11:10
Last Modified:	24 May 2025 11:48
DOI:	10.1162/0034653053327603
Related Websites:	Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3028416