Profits and market power in Greek manufacturing industries.
The traditional approach to antitrust, associated with the Harvard school, regards
monopoly as a mechanism that reduces consumers' surplus, while the view held by the
Chicago school suggests that a large firm market share reflects superior competitive
performance and, if it is not the result of collusion, its effect on allocative efficiency is
a rather non - malignant one. We attempt to evaluate the two antitrust approaches
within the context of Greek manufacturing industries, and the novelties in the present
thesis lie in bringing into the examination of the Harvard - Chicago debate a number
of issues that have been treated as separate attempts to unveil the competitive
process in the U.S. and the U.K., but never included together within a single
comprehensive study. This is achieved by analyzing the profits - concentration
relationship over a number of years, the influence of firm and industry characteristics
on the determination of profit rates, growth and survival patterns of firms taking into
consideration sample selection bias problems, the persistence of manufacturing
profitability oyer time, the structural firm and industry determinants of leading firms'
profitability and the importance of multinational corporations.
Our main empirical findings reveal that large firms and more concentrated markets in
Greece are no more profitable than smaller firms and less concentrated markets
respectively, and although they refute the extreme forms of the market power and
efficiency hypotheses, market power did hold sway in a number of circumstances and
its role plays a greater part in the behaviour of manufacturing industries and firms in
Greece. Greek antitrust authorities should be concerned with firms' strategic
behaviour related to the restriction of competition in more concentrated markets, ane
on the above grounds, we do not recommend a deconcentration policy per se, bu'
intervention when the competitive functioning of markets is unfairly hindered