Can Imperfect Competition Explain the Difference between Primal and Dual Productivity Measures? Estimates for U.S. Manufacturing

Roeger, Werner

doi:10.1086/261985

Cited by 373 publications

(464 citation statements)

References 16 publications

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“…Basu, 1996), while others hint slightly higher values, which can exceed 70 percent (e.g. Roeger, 1995;Funke and Strulik, 2000). Consistent with this, and also attending to the fact that our model considers quality driven R&D, which is usually associated to larger markups, in part due to the market power conferred by the patent system, we define an acceptable range for p of 1.4-1.6.…”

Section: A Typical Calibrationsupporting

confidence: 52%

The Politics of Growth: Can Lobbying Raise Growth and Welfare?

Júlio¹

2009

SSRN Journal

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This paper aims at analyzing the effects of lobbying over economic growth and primarily welfare. We model explicitly the interaction between policy-makers and firms in a setup where the latter undertakes political contributions to the former in exchange for more restrictive market regulations which induce exit and enhance the profitability of the market. In a sectorial equilibrium, despite stimulating growth, lobbying restricts the market structure and reduces welfare when compared to the free-entry outcome. However, once general equilibrium considerations are taken into account, we find that lobbying may improve welfare over a welfare maximizing free-entry equilibrium, by means of an expansion in aggregate demand. This introduces a new paradigm in the literature about the effects of lobbying over economic performance.JEL classification: D72, L13, O31.

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Section: A Typical Calibrationsupporting

confidence: 52%

The Politics of Growth: Can Lobbying Raise Growth and Welfare?

Júlio¹

2009

SSRN Journal

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“…In terms of the econometric implementation of Hall's idea, there are also problems of selecting adequate instruments for (for example, see Roeger (1995)) and many others also argue that it is undesirable to assume constant returns to scale. Indeed, constant returns to scale implies that (??)…”

Section: Existing Markup Methodologymentioning

confidence: 99%

The Price–marginal Cost Markup and Its Determinants in U.S. Manufacturing

Mazumder

2013

Macroecon. Dynam.

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This paper estimates the price-marginal cost markup for US manufacturing using a new methodology. Most existing techniques of estimating the markup are a variant on Hall's (1988) framework involving the manipulation of the Solow Residual. However this paper argues that this notion is based on the unreasonable assumption that labor can be costlessly adjusted at a fixed wage rate. By relaxing this assumption, we are able to derive a generalized markup index, which when estimated using manufacturing data is highly countercyclical and decreasing in trend since the 1960s. When we then seek to explain what causes the manufacturing markup to behave in this way, the most important determinant is the share of imported goods in the industry. Thus, increasing foreign competition in manufacturing has led to a decline in the industry's markup over time.JEL Classification: D24, D40, E32

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“…Previous empirical research has used Equations (64) or (66) to estimate markups by using instrumental variables but some times is di¢ cult to …nd exogenous instruments (see, for example, Olley and Pakes (1996) and Levishon and Petrin (2003)). Roeger (1995) proposes using the price-based (or dual) Solow residual or the dual Solow residual to deal with this problem. Speci…cally, using the cost minimization problem and also imposing constant returns to scale, Roeger proposes decomposing the dual Solow residual (DSR) as in equation (66):…”

Section: Discussionmentioning

confidence: 99%

“…We estimate markups using the methodology of Roeger (1995). This approach allows us to obtain markups -by industry or by …rm-estimating only one parameter and controlling for potential endogeneity of the productivity shocks.…”

Section: The Empirical Implementationmentioning

confidence: 99%

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Interpreting Markups in Spanish Manufacturing: The Exponential Model

Corchón

Moreno²

2016

Equilibrium Theory for Cournot Oligopolies and Related Games

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In this paper we attempt to rationalize markups in a sample of Spanish manufacturing by assuming a representative consumer, pro…t-maximizing …rms and constant returns to scale. We …nd that the standard forms of demand (CES and linear) do not provide a good explanation of markups.In contrast, a model where the representative consumer has an exponential utilty function yields results that match data more closely.We thank Carmen Beviá, Luis Cabral, Natalia Fabra, José María Sastre, Galina Zudenkova and the participants in a seminar at Carlos III University, especially Cesar Alonso and Paco Marhuenda, for very helpful comments, and Diego Rodríguez for programming support and data. The …rst author acknowledges …nancial support from ECO2008-02738/ECON.The second author acknowledges …nancial support from SEJ2007-66520/ECON.

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Can Imperfect Competition Explain the Difference between Primal and Dual Productivity Measures? Estimates for U.S. Manufacturing

Cited by 373 publications

References 16 publications

The Politics of Growth: Can Lobbying Raise Growth and Welfare?

The Politics of Growth: Can Lobbying Raise Growth and Welfare?

The Price–marginal Cost Markup and Its Determinants in U.S. Manufacturing

Interpreting Markups in Spanish Manufacturing: The Exponential Model

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