Abstract
Although four-digit concentration ratios remained roughly constant in the quarter century between 1958 and 1982, they declined significantly when adjusted for imports. The empirical analysis in this paper shows that changes in both types of four-digit concentration ratios were related to the initial level of industrial concentration, barriers to entry, market growth, and to a set of adjustment variables reflecting an interaction of imports and particular structural aspects of the industry. Speculations about the future of competition in the United States are based on the regression equations explaining changes in concentration.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Aaronovitch, Sam, and Malcolm L. Sawyer (1975) ‘Mergers, Growth and Concentration’,Oxford Economic Papers, N.S.27(1), 136–55.
Abowd, John M. (1991) ‘The NBER Immigration, Trade and Labor Market Data Files’, in John M. Abowd and Richard B. Freeman, eds.Immigration, Trade, and the Labor Market. Chicago: University of Chicago Press for N.B.E.R.
Caves, Richard E., and Michael Porter (1976) ‘Barriers to Exit’, in Robert T. Masson and P. David Qualls,Essays on Industrial Organization in Honor of Joe S. Bain. Cambridge: Ballinger, 639–69].
(1980) ‘The Dynamics of Changing Seller Concentration’,Journal of Industrial Economics,29(1), 1–15.
Caves, Richard E. (1988) ‘Trade Exposure and Changing Structures of U.S. Manufacturing Industries’, in Michael A. Spence and Heather A. Hazard, eds.International Competitiveness. Cambridge Mass.: Harper and Row, Ballinger.
Cohen, Stephen S., and John Zysman (1987)Manufacturing Matters: The Myth of the Post Industrial Economy. New York: Basic Books.
Curry, B., and K.D. George (1983) ‘Industrial Concentration: A Survey’,Journal of Industrial Economics,23, 203–55.
Duchesneau, Thomas D. (1974) ‘Barriers to Entry and the Stability of Market Structures: A Note’,Journal of Industrial Economics,22, 315–20.
Globerman, Steven, and James W. Dean (1990) ‘Recent Trends in Intra-Industry Trade and Their Implications for Future Trade Liberalization’,Weltwirtschaftliches Archiv 126, 25–49.
Hart, P.E., and R. Clarke (1980)Concentration in British Industry, 1935–75. Cambridge, England: Cambridge University Press for National Institution of Economic and Social Research.
Houthakker, H.S., and Stephen Magee (1969) ‘Income and Price Elasticities in World Trade’,Review of Economics and Statistics,51, 111–126.
Jones, J.C.H., L. Laudadio, and M. Percy (1973) ‘Market Structure and Profitability in Canadian Manufacturing Industry: Some Cross Section Results’,Canadian Journal of Economics,6, 356–368.
Kessides, Ionnis N. (1990) ‘Market Concentration, Contestability, and Sunk Costs’,Review of Economics and Statistics,72, 614–23.
Kohli, Ulrich (1990) ‘Price and Quantity Elasticities in U.S. Foreign Trade’,Economic Letters 33, 277–81.
Mueller, Willard F., and Larry G. Hamm (1974) ‘Trends in Industrial Market Concentration, 1947 to 1970’,Review of Economics and Statistics,56, 511–20.
Mueller, Willard F., and Richard T. Rogers (1980) ‘The Role of Advertising in Changing Concentration of Manufacturing Industries’,Review of Economics and Statistics 62, 89–96.
de Melo, Jaime, and Shujiro Urata (1986) ‘The Influence of Increased Foreign Competition on Industrial Concentration and Profitability’,International Journal of Industrial Organization,4, 287–304.
Olson, Mancur (1982)The Rise and Decline of Nations: Economic Growth, Stagflation and Social Rigidities. New Haven: Yale University Press.
Pryor, Frederic L. (1993) ‘A Puzzle about Intra-Industry Trade’,Weltwirtschaftliches Archiv 128, 742–6.
Pryor, Frederic L. (Forthcoming),Complexity and the Economy.
Rose, Andrew (1991) ‘Why has Trade Grown Faster than Income’,Canadian Journal of Economics 24, 417–27.
Scherer, F.M. (1979) ‘The Causes and Consequences of Rising Industrial Concentration’,Journal of Law and Economics,22, 191–208.
Shepherd, William G. (1966) ‘Changes in British Industrial Concentration’,Oxford Economic Papers 18, 126–33.
Shepherd, William G. (1982) ‘Causes of Increased Competition in the U.S. Economy, 1939–1980’,Review of Economics and Statistics,64, 613–626.
Sweden, Statens offentliga utredningar, Finansdepartementet (1968)Industrins struktur och konkurrensförhållanden. Stockholm.
U.S. Council of Economic Advisors (annual)Economic Report of the President. Washington, D.C.: G.P.O.
U.S. Department of Commerce, Bureau of the Census (1961)1958 Census of Manufactures, Volume 1,Summary Statistics. Washington, D.C.: G.P.O.
U.S. Department of Commerce, Bureau of the Census (1963)U.S. Census of Population: 1960, Subject Reports,Occupation by Industry (Final Report PC(2)-7c). Washington, D.C.: G.P.O.
U.S. Department of Commerce, Bureau of the Census (1966)1963 Census of Manufactures, Volume 1,Summary and Subject Statistics. Washington, D.C.: G.P.O.
U.S. Department of Commerce, Bureau of the Census (1976)1972 Census of Manufactures. Washington, D.C.
U.S. Department of Commerce, Bureau of the Census (1984)1980 Census of Population, Subject Report,Occupation by Industry. Washington, D.C.: G.P.O.
U.S. Department of Commerce, Bureau of the Census (1986a)1982 Census of Manufactures, Subject Series,Concentration Ratios in Manufacturing. Washington, D.C.: G.P.O.
U.S. Department of Commerce, Bureau of the Census (1986b)1982 Census of Manufactures, Subject Series,General Summary. Washington, D.C.: G.P.O.
U.S. Department of Commerce, Bureau of Economic Analysis (1985)Foreign Direct Investment in the United States: Revised 1982 Estimates. Washington, D.C.
U.S. Department of Commerce, Bureau of Economic Analysis (1986)The National Income and Product Accounts of the United States, 1929–82. Washington, D.C.: G.P.O.
U.S. Department of Labor, Bureau of Labor Statistics (1969)Tomorrow's Manpower Needs, Volume 4,The National Industry-Occupational Matrix and Other Manpower Data, Bulletin No. 1606.
Wright, Neil R. (1978) ‘Product Differentiation, Concentration, and Changes in Concentration’,Review of Economics and Statistics,60, 628–31.
Author information
Authors and Affiliations
Additional information
I would like to thank John Caskey, Ellen Magenheim, Lee Perlman, Zora Pryor, F. M. Scherer, and participants of the Swarthmore Economics Department's Summer Brown Bag Lunch for comments on an earlier draft. I am also grateful to Chang-Tai Hsieh, who served as a research assistant in the initial stages of research, to the Swarthmore College Faculty Research Fund for financing, to the Brookings Institution where this essay was completed, and to Richard Caves and Lawrence Katz for supplying data classified by four-digit industries to me. Of course, only I am responsible for my conclusions and errors.
Rights and permissions
About this article
Cite this article
Pryor, F.L. The evolution of competition in U.S. manufacturing. Rev Ind Organ 9, 695–715 (1994). https://doi.org/10.1007/BF01026580
Issue Date:
DOI: https://doi.org/10.1007/BF01026580