This study is concerned with the explanation of differences in price-cost margins of manufacturing industries using a longitudinal data set consisting of averaged data from 66 Dutch industries from 1974 through 1986. Our major concern is investigating whether price-cost margins are more procyclical in concentrated than in unconcentrated industries. The relation between the size of the mark-up of price over marginal cost and the degree of imperfect competition has received considerable attention in the industrial organisation literature. See Cubbin (1988) and Schmalensee (1989) for almost exhaustive surveys of the empirical literature. One of the main indicators of the degree of imperfect competition is seller concentration. The correct measurement of the influence of seller concentration on the size of the mark-up depends on the level of demand pressures (see section 2 for a discussion). This influence can be best measured using a panel data set covering a period including various stages of the business cycle.

Netherlands, manufacturing trade, prices
De Economist
Erasmus School of Economics

Thurik, A.R, & Prince, Y.M. (1992). Price-cost margins in Dutch manufacturing: effects of concentration, business cycle and international trade. De Economist. Retrieved from