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Title Mark-up Pricing in South African Industry
Full text http://hdl.handle.net/1885/34573
Date 2006
Author(s) Fedderke, Johannes; Kularatne, Chandana; Mariotti, Martine
Abstract This paper investigates the extent of the mark-up of the South African manufacturing sector, taking into account a number of characteristics of its component industries. We find significant mark-ups to be present in the South African manufacturing sector. In comparative terms, the mark-up is approximately twice that found for the US manufacturing sector. We find that industry concentration exerts a positive influence on the mark-up over marginal cost while an indicator of competitiveness suggests that an increase in an industry's competitiveness relative to other industries allows it to raise its mark-up. However, within-industry increases in competitiveness reduces the mark-up. We also analyse the impact of import and export penetration. Both import and export penetration serve to lower the mark-up. The impact of the business cycle on mark-up indicates that the mark-up is countercyclical. Finally, accounting for intermediate inputs significantly lowers the absolute size of the mark-up, controlling for the industry's concentration ratio. However, relative to findings on the US manufacturing industries, SA manufacturing mark-ups remain approximately twice as large.
Subject(s) Keywords: business cycle; competitiveness; export; import; industrial competition; manufacturing; Africa; North America; South Africa; Southern Africa; Sub-Saharan Africa; United States
Publisher Oxford University Press
Type of publication Journal article
Source Journal of African Economies
Identifier 0963-8024
Repository Canberra - Australian National University
Added to C-A: 2016-01-14;09:03:58