Market size, markups and international price dispersion in the cement industry

Leone, Fabrizio, Macchiavello, Rocco and Reed, Tristan (2022) Market size, markups and international price dispersion in the cement industry. CEP Discussion Papers (CEPDP1862). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

Prices for several intermediate inputs, including cement, are higher in developing economies - particularly in Africa. Combining data from the International Comparison Program with a global directory of cement plants we estimate an industry equilibrium model to distinguish between drivers of international price dispersion: demand, costs, conduct, and entry. Developing economies feature both higher marginal costs and higher markups. African markets are not characterized by higher barriers to entry and, if anything, feature relatively more competitive conduct. The small size of many national markets, however, limits entry and competition and explains most of the higher markups. Policy implications are discussed.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2022 The Author(s)
Divisions:	Management
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level; Inflation; Deflation L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets L - Industrial Organization > L6 - Industry Studies: Manufacturing > L61 - Metals and Metal Products; Cement; Glass; Ceramics O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
Date Deposited:	19 Jan 2023 11:18
Last Modified:	01 Mar 2024 11:48
URI:	http://eprints.lse.ac.uk/id/eprint/117954

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