Market power and profit margin under imperfect competitive markets

Research Project

Project/Area Number	21530239
Research Category	Grant-in-Aid for Scientific Research (C)
Allocation Type	Single-year Grants
Section	一般
Research Field	Applied economics
Research Institution	International University of Japan
Principal Investigator	KIM Donghun 国際大学, 研究所, 准教授 (60387313)
Co-Investigator(Kenkyū-buntansha)	KAKINAKA Makoto 国際大学, 国際関係学研究科, 教授 (40421234)
Project Period (FY)	2009 – 2011
Project Status	Completed (Fiscal Year 2011)
Budget Amount *help	¥4,420,000 (Direct Cost: ¥3,400,000、Indirect Cost: ¥1,020,000) Fiscal Year 2011: ¥910,000 (Direct Cost: ¥700,000、Indirect Cost: ¥210,000) Fiscal Year 2010: ¥910,000 (Direct Cost: ¥700,000、Indirect Cost: ¥210,000) Fiscal Year 2009: ¥2,600,000 (Direct Cost: ¥2,000,000、Indirect Cost: ¥600,000)
Keywords	寡占市場 / 利益マージン / 不完全競争 / 産業組織 / 市場支配力 / 実証産業組織論
Research Abstract	Conventional theory of industrial organization discusses monopolistic product markets by assuming that factor prices, such as wage rate, are determined in a perfectly competitive market. On the other hand, conventional labor economics discusses imperfect labor markets by assuming that product prices are determined in a perfectly competitive market. However, since factor and product markets generally violate the assumption of perfect competition, the discussion of profit margins requires the incorporation of the special features of these markets. Given these arguments, this research project empirically examines the profit margins for Japanese manufacturing sector. We first studied the dynamic relationship among profit margins, market power, and product-life cycle in the DRAM industry, where Japanese firms have been playing an important role. Then we empirically analyzed the relationship between profit and firm growth for 1633 Japanese manufacturing firms.