Abstract
This paper deals with the econometric estimation of a traditional profitability model employing cross-section data for 110 4-digit Canadian manufacturing industries for the period 1972–1976. A series of estimations and statistical tests suggest that the relationship between industry price—cost margins and the Herfindahl index of concentration is non-linear, non-monotonic but exhibits an everal upward trend across concentration classes. Empirical evidence regarding the disciplinary effect of imports does not support the import competition hypothesis.
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Zaralis, G. Profitability, concentration and trade flows: Issues of non-linearity and exogeneity. Rev Ind Organ 6, 215–229 (1991). https://doi.org/10.1007/BF00378123
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DOI: https://doi.org/10.1007/BF00378123