Arbeitspapier
Does firm exit raise prices?
This paper examines how changes in product market concentration, specifically firm exit, affect prices. I develop a model where firms have variable markups to show that the remaining firms increase their markups and prices after their competitors' exit. The model predictions are tested using micro-data on Swedish firms. I use the exposure of firms to a bank, which was severely affected by the financial crisis abroad, as an instrument to identify the causal relationship between firm exit and prices. I find that the remaining firms increase their prices by 0.3 percent when firms with a combined market share of one percent exit.
- Sprache
-
Englisch
- Erschienen in
-
Series: IFN Working Paper ; No. 1414
- Klassifikation
-
Wirtschaft
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Price Level; Inflation; Deflation
Business Fluctuations; Cycles
Oligopoly and Other Imperfect Markets
Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
Industry Studies: Manufacturing: General
- Thema
-
Price setting
Market structure
Financial shocks
Firm exit
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Suveg, Melinda
- Ereignis
-
Veröffentlichung
- (wer)
-
Research Institute of Industrial Economics (IFN)
- (wo)
-
Stockholm
- (wann)
-
2021
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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Objekttyp
- Arbeitspapier
Beteiligte
- Suveg, Melinda
- Research Institute of Industrial Economics (IFN)
Entstanden
- 2021
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