Markups and Concentration in Eswatini: A Firm-Level Analysis of Panel Data

This paper uses panel data for manufacturers during 1994-2007 to calculate price-cost margins

From:
Foreign, Commonwealth & Development Office
Published
29 December 2020
Document Type:
Working Paper
Theme:
Economic Growth
Authors:
Mhlanga, S

Abstract

This paper documents the evolution of markups and concentration, detects causality between firm churning and markups/concentration, and determines the impact of fixed/sunk costs on markups. It relies on panel data for Eswatini manufacturers during 1994-2007 to calculate price-cost margins and use the production approach to estimate markups. It finds elasticities, markups and concentration to be comparable with findings in other studies. Although no causality from markups/concentration to entry/exit dynamics is found, an increase in productivity within high capital stock industries and fixed/sunk costs raised average markups. Further research will focus on markup state dependence, unobserved heterogeneity, and endogenous regime switching to assess markup pricing.

This work is part of the Private Enterprise Development in Low Income Countries (PEDL) programme

Citation

Mhlanga, S. “Markups and Concentration in Eswatini: A Firm-Level Analysis of Panel Data” Working Paper

Markups and Concentration in Eswatini: A Firm-Level Analysis of Panel Data

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Published 29 December 2020
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