Short-run equilibrium and market power in the Spanish food, drink and tobacco industries.

摘要

This paper studies the cost structure and market power of 18 Spanish food industries, at roughly the three-digit level, for the period 1978-1992. Tests of capital equilibrium and approaches to estimation of the Lerner index are developed. Long-run equilibrium is rejected for almost all industries. It is argued that, in general, economies of scale and market power are not jointly identifiable in the structural analysis, with similar problems as in non-structural approaches. Moreover, when long-run equilibrium and constant returns to scale are assumed, the econometric estimates of the Lerner index are similar to those obtained with the traditional profit-to-sales ratio, irrespective of whether capital is a quasi-fixed or a variable input.