Review of Industrial Organization

, Volume 2, Issue 3, pp 232–249 | Cite as

The impact of international intra-firm trade on domestic concentration ratios

  • Cletus C. Coughlin
  • Thomas G. Watkins
Articles

Abstract

This paper examines the impact of intra-firm foreign trade on domestic concentration ratios and the interchangeability of trade-adjusted concentration ratios in structure-performance studies. Due to data limitations, previous efforts to adjust domestic concentration ratios have not incorporated the possibility that the largest domestic producers could also be importing the product into the domestic market. Foreign trade adjustments, both intra-firm trade by the leading firms and foreign trade in general, had a relatively small effect upon concentration in the majority of industries; however, approximately 20 industries were identified where foreign, trade is a potentially important competitive factor. Concerning the interchangeability of the estimated concent cation ratios, the results suggested that the measures were interchangeable in linear models, but were not interchangeable in log-linear models.

Keywords

Large Firm Foreign Trade Domestic Market Foreign Firm Related Import 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
This is a preview of subscription content, log in to check access.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Cannon, C.M. “International Trade, Concentration, and Competition in U.K. Consumer Goods Markets”,Oxford Economic Papers 30 (March 1978), 130–137.Google Scholar
  2. Helleiner, G.K. and R. Lavergne. “Intra-Firm Trade and Industrial Exports to the United States,”Oxford Bulletin of Economics and Statistics 41 (November 1979), 297–311.CrossRefGoogle Scholar
  3. Jackson, J.D. and J. Dunlevy. “The Interchangeability of Alternative Measures of Permanent Income in Regression Analysis”,Applied Economics 14 (October 1982b), 455–468.Google Scholar
  4. —. “Interchanging Measures of Firm Size: An Asymptotic Test and Further Results”,Southern Economic Journal 48 (January 1982a), 764–768.CrossRefGoogle Scholar
  5. Jackson, J.D. “The Orthogonal Least Squares Slope Estimator: Interval Estimation and Hypothesis Testing Under the Assumption of Bivariate Normality”,1981 Business and Economics Statistics Section Proceedings of the American Statistical Association, 294–297.Google Scholar
  6. Kwoka, J.E., Jr. “Does the Choice of Concentration Measure Really Matter?Journal of Industrial Economics 29 (June 1981), 445–453.CrossRefGoogle Scholar
  7. Leitzinger, J.L. and K.L. Tamor. “Foreign Competition in Antitrust Law,”Journal of Law and Economics 26 (April 1983), 87–102.CrossRefGoogle Scholar
  8. Lunn, J. “An Empirical Investigation of the Effects (?) of Foreign Trade on the Measurement of Industrial Concentration,” paper presented at the Eastern Economic Association meetings, Boston, Massachusetts, March 1983.Google Scholar
  9. Lunn, J. “Foreign Trade and Measures of Domestic Monopoly Power,” paper presented at the Southern Economic Association meetings, New Orleans, Louisiana, November 1981.Google Scholar
  10. — “Trade-Adjusted Concentration Ratios”,The Antitrust Bulletin 29 (Fall 1984), 523–534.Google Scholar
  11. Marfels, C. “The Impact of Foreign Trade on Concentration Levels: Empirical Findings for Caundian Manufacturing Industries and for the Steel Industries of Four Countries”,The Antitrust Bullet In 24 (Spring 1979), 129–147.Google Scholar
  12. Ornstein, S.I. “Empirical Uses of the Price-Cost Margin”,Journal of Industrial Economics 24 (December 1975), 105–117.CrossRefGoogle Scholar
  13. Schwartzman, D. and J. Bodoff. “Concentration in Regional and Local Industries”,Southern Economic Journal 37 (January 1971), 343–348.CrossRefGoogle Scholar
  14. Shepherd, W.G. “Structure and Behavior in British Industries with U.S. Comparisons,”Journal of Industrial Economics 21 (November 1972), 35–54.CrossRefGoogle Scholar
  15. Sichel, W. “The Foreign Competition Omission in Census Concentration Ratios”,The Antitrust Bulletin 20 (Spring 1975), 89–105.Google Scholar
  16. Smyth, D.J., W.J. Boyes and D.E. Peseau. “Measurement of Firm Size: Theory and Evidence for the United States and the United Kingdom”,Review of Economics und Statistics 57 (February 1975) 111–114.CrossRefGoogle Scholar
  17. Utton, M.A. “Domestic Concentration and International Trade,”Oxford Economic Papers 34 (November 1982), 479–497.Google Scholar
  18. U.S. Department of Commerce, Bureau of the Census. 1977Census of Manufactures, Washington, D.C.: U.S. Government Printing Office, 1981.Google Scholar
  19. U.S. Department of Commerce, Bureau of the Census. Foreign Trade Division Document IQ246.Google Scholar
  20. —.U.S. Commodity Exports and Imports as Related to Output: 1976–1977, Washington, D.C.: U.S. Government Printing Office, 1982.Google Scholar

Copyright information

© Review of Industrial Organization 1985

Authors and Affiliations

  • Cletus C. Coughlin
  • Thomas G. Watkins
    • 1
    • 2
  1. 1.University of GeorgiaGeorgiaUSA
  2. 2.Eastern Kentucky UniversityUSA

Personalised recommendations