Testing for market power in the Norwegian primary aluminium industry
Working paper
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http://hdl.handle.net/11250/2628739Utgivelsesdato
1994-11Metadata
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- Discussion Papers [1002]
Sammendrag
The hypothesis of market power in the Norwegian primary aluminium industry is tested using plant-level panel data. Economies of scale are found to be present, and Norwegian aluminium plants charge a procyclical price-cost margin that significantly exceeds zero. Consequently, the simple competitive hypothesis is rejected. The hypothesis that products are differentiated is not rejected, since several plants are found to charge a price permanently over the world market price. A decline in industry concentration internationally, which is assumed to increase the degree of competition, has no significant effect on the price-cost margins of Norwegian plants.