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Autor:innen: 
Erscheinungsjahr: 
2021
Schriftenreihe/Nr.: 
IFN Working Paper No. 1414
Verlag: 
Research Institute of Industrial Economics (IFN), Stockholm
Zusammenfassung: 
This paper examines how changes in product market concentration, specifically firm exit, affect prices. I develop a model where firms have variable markups to show that the remaining firms increase their markups and prices after their competitors' exit. The model predictions are tested using micro-data on Swedish firms. I use the exposure of firms to a bank, which was severely affected by the financial crisis abroad, as an instrument to identify the causal relationship between firm exit and prices. I find that the remaining firms increase their prices by 0.3 percent when firms with a combined market share of one percent exit.
Schlagwörter: 
Price setting
Market structure
Financial shocks
Firm exit
JEL: 
D43
E31
E32
L13
L16
L60
Dokumentart: 
Working Paper

Datei(en):
Datei
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