Assessing the Impact of Globalization of Economy and Business Cycles on Markups in Iran’s Industry

Document Type : Research Paper

Abstract

The purpose of this study is to investigate the impact of globalization of economy and cycles on markups ( the gap between price and finished cost) of domestic industries. To this end, the index of scope of international relations in terms of commerce has been used as an index of globalization. In this study first, markups have been assessed and then the data related to 131 industries, the four digit code of ISIC, and the industry import data have been utilized. Based on the results of assessing markups in industries, P ˃ MC has been observed in all industries of Iran. After assessing mark ups, the second part of the article deals with the ways variables of cycles and economic globalization have impacted markups of domestic industries utilizing the method of cross sectional data and Ordinary Least Squares (OLS). Results of final estimation of the model reveal that the variable of economic globalization has negative effects on domestic industry mark ups. This shows that increase in economic globalization and commerce causes market structure of domestic industries move towards competition. Furthermore, the variable of cycle has a positively significant effect on domestic industries’ markups. Interactive effect of globalization and cycle on markups of domestic industries is negative i.e. introducing the variable of economic globalization to the model reduces the positive effect of cycle variable on markups.
 

Keywords

References

-       خداداد کاشی، فرهاد. (1379). انحصار، رقابت و تمرکز در بازارهای صنعتی ایران، فصل‌نامه‌ی شماره‌ی 15 پژوهش‌نامه‌ی بازرگانی.
-    شهیکی تاش، محمد نبی و  اتباعی، فرامرز. (1391).  تاثیر رقابت خارجی بر شدت رقابت و مارک‌آپ در بازارهای  صنعتی ایران، فصل‌نامه‌ی مطالعات اقتصادی کاربردی در ایران، سال اول، شماره‌ی 3، صفحات 55-27.
-    خداداد کاشی، فرهاد. (1388). دیدگاه‌‌های مختلف در مورد مفهوم و نظریه‌‌ی رقابت، فصل‌نامه‌ی پژوهش‌‌ها و سیاست‌‌های اقتصادی، سال هفدهم، شماره‌‌ی 51.
-    احمدوند، محمدرحیم و دیلمی‌‌نژاد، رضا. (1386). بررسی فرایند جهانی شدن بخش صنعت و معدن در ایران، فصل‌نامه‌ی پژوهش‌ها و سیاست‌های اقتصادی، شماره‌ی 39-40.
-       پورمقیم، سیدجواد. (1388). تجارت بین‌‌الملل، (چاپ سیزدهم). نظریه‌‌ها و سیاست‌‌های بازرگانی، نشر نی.
-    پژویان، جمشید، خداداد کاشی، فرهاد و شهیکی تاش، محمدنبی، ارزیابی شکاف بین قیمت و هزینه نهایی در صنایع ایران، مجله‌ی اقتصاد، شماره‌‌ی 26.
-          Aileen J. Thompson. (2001). Import Competition and Market Power: Canadian Evidence, Federal Trade Commission Washington, DC.
-          Akbar Ullah ,Ejaz Ghani, and Attiya Y. Javed.(2013), Market Power and Industrial Performance in Pakistan, Pakistan Institute of Development Economics, PIDE Working Papers.
-          Ashenfelter, O. & D Sullivan.(1987). Nonparametric Test of Market Structure: An Application to the Cigarette industry, Journal of Industrial Economics.
-          Amazz, A. R, A, Lopez, & C,Liron-Espana. (2002). Market Power and Efficiency: A structural approach, Review of Industrial Organization, 115-126.
-          Thompson, Aileen J. (2001) Import Competition and Market Power: Canadian Evidence, Federal Trade Commission Washington, DC.
-          Waterson, Cowling, K. & M. (1976). Price- Cost Margin and Market Structure, Economica, 267-274.
-          Masson, Geroski. P. R, & shaanan, J, (1987), The Dynamic of Market Structure, International Journal of Industrial Organization.
-          Hall, R, (1988), the Relationship between Price and Marginal Cost in U.S Industry, Journal of political Economy.
-          Joaquim, Oliveira Martins, Scarpetta, Stefano and Pilat, Dirk, (1996). Mark- up Pricing, Market Structure and The Business Cycle, OECD Economic Studies.
-          Beccarello, Massimo. (1996), ‘Time Series Analysis of Market Power: Evidence from G-7 Manufacturing’, International Journal of Industrial Organization, 3–136.
-          Vivek, Ghosal, (2000), Product Market Competition and the Industry Price–Cost Markup Fluctuations: Role of Energy and Monetary Changes’, International Journal of Industrial Organization, 415–444.
-          Sandeep Mazumder, (2009) The Price-Marginal Cost Markup and its Determinants in U.S. Manufacturing, MPRA Paper No. 17260.
-          Kozo Kiyota,( 2010), Productivity, Markup, Scale Economies, and the Business Cycle: Estimates from firm-level panel data in Japan, The Research Institute of Economy, Trade and Industry, Discussion Paper Series 10-E-040.
-          Mariotti, Martine,( 2007), Mark-up Pricing in South African Industry, Journal of African Economies, Vol. 16, Issue 1, 28-69.
-          Caves, R. E, (1985), International Trade and Industrial Organization: Problems Solved and Unsolved. European Economic Review, 377–395.
Strategic Studies of public policy
Volume 5, Issue 16 - Serial Number 16
February 2015
Pages 163-187

Files

Share

How to cite

Statistics