Industrial price formation and industry concentration in Canadian manufacturing industries [thesis]

Nancy Cebryk
The purpose of this investigation is to test for the implications of alternative micro pricing policies at the aggregate industry level and to determine if, and to what extent, industries in a small open economy are able to adjust price when they are subjected to input cost increases. It is assumed that the pricing policy followed by firms is an s,S policy. Four a priori outcomes are considered, each reflecting varying degrees of cost pass-through ability based on the degree of industry
more » ... of industry concentration and price stickiness across Canadian manufachlring indusuies. The results support the theory that as fixed adjustment costs increase prices are changed less frequently and the unit return u, capital is reduced. For some industries the evidence is not as conclusive. This may be explained by: varying fixed or heterogeneous costs of adjustment, both across and within industries; the influences of international trade on a small, open economy; the degree of industry concentration; and lags due to inventory adjustments.
doi:10.22215/etd/1997-03597 fatcat:muhrmltwk5fernqfrxexuanuiu