Determinants of price-cost-margins over the business cycle for food industries: An international comparison

Julia Körner, Christoph Weiss

Published: 01.05.2001  〉 Heft 3 (von 8) 2001  〉 Resort: Articles 
Submitted: N. A.   〉 Feedback to authors after first review: N. A.   〉 Accepted: N. A.

ABSTRACT

Based upon the structure-conduct-performance approach the present paper analyses determinants of price-cost-margins over the business cycle for food industries in Germany, the USA as well as the Netherlands. Controlling for market structure variables, cyclical fluctuations in profitability are interpreted as evidence for changes in firm behaviour. The econometric panel data models reveal pro-cyclic fluctuations of profits in highly concentrated industries in Germany. In contrast, profitability in competitive industries in Germany as well as in all US food industries are found to be more stable over the business cycle. This observation is explicable in terms of a more aggressive behaviour of firms in boom periods. The econometric model does not adequately explain industry differences in profitability in the Netherlands.
CONTACT AUTHOR
Dipl.-Volksw. Julia Körner und Prof. Dr. Christoph Weiss Institut für Ernährungswirtschaft und Verbrauchslehre, Christian-Albrechts-Universität zu Kiel, Olshausenstraße 40, D-24098 Kiel (E-Mail: jkoerner@food-econ.uni-kiel.de).
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