Market Structure and Productivity: A Concrete Example
Опубликовано на портале: 17-09-2008
Journal of Political Economy. 2004. Vol. 112. No. 6.
The specific mechanism investigated here is the effect of spatial substitutability in the product market. When producers are densely clustered in a market, it is easier for consumers to switch between suppliers (making the market in a certain sense more competitive). Relatively inefficient producers find it more difficult to operate profitably as a result. Substitutability increases truncate the productivity distribution from below, resulting in higher minimum and average productivity levels as well as less productivity dispersion. The paper presents a model that makes this process explicit and empirically tests it using data from U.S. ready-mixed concrete plants, taking advantage of geographic variation in substitutability created by the industry's high transport costs. The results support the model's predictions and appear robust. Markets with high demand density for ready-mixed concrete and thus high concrete plant densities have higher lower-bound and average productivity levels and exhibit less productivity dispersion among their producers.
Персональная страница Алвина Рота (Alvin E. Roth, Professor of Economics and Business Administration in the Department of Economics at Harvard University): Al Roth's game theory and experimental economics page
On the Relation between the Expected Value and the Volatility of the Nominal Excess Return on Stocks
Journal of Finance. 1993. Vol. 48. No. 5. P. 1779-1801.
Review of Economic Studies. 1995. Vol. 62. No. 1. P. 53-82.