Industry Consolidation and Price: Evidence from the U.S. Linerboard Industry
نویسندگان
چکیده
Starting from the 1980’s, the U.S. paper and paperboard industry has recorded an increasing degree of consolidation through mergers and acquisitions. This strategy, combined with voluntary downtime, is adopted by producers as a mean to tackle excess capacity and to reduce costs in order to improve profitability. However, it is unclear whether the rising market concentration resulted in market power. In this study, we investigate the impact of industry consolidation on price in the linerboard industry. We estimate a dynamic demand/supply system model that explicitly incorporates market structure, using monthly data from January 1982 to December 1999. As shown in our results, the price is mainly influenced by consumption and material cost. We also find that operating rate has positive and statistically significant impacts on price. However, market concentration does not show any statistically significant effects on price.
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تاریخ انتشار 2005