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dc.titleProductivity and Market Power: The Case of Manufacturing Firms of Peru 2002-2019
dc.contributor.authorTello, Mario D.
dc.contributor.authorTello-Trillo, Daniel Sebastian
dc.contributor.authorRojas Lara, Pablo Enrique
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coveragePeru
dc.date.available2025-03-20T00:03:00
dc.date.issue2025-03-20T00:03:00
dc.description.abstractThis paper uses seven standard market power indicators (price-cost margin, and six drawn upon the production approach) to estimate the effect market power on the rate of change of total factor productivity for a sample of formal manufacturing firms of Peru for the period 2002-2019. After applying exogeneity tests and implementing panel data with fixed effects instrumental variable method, the results are not clear about the causal relationship between market power and firms' TFP. However, when the Double-Debiased machine learning (DML) causal method is applied for fixed effects panel data with and without instruments, firms market power robustly seems not to affect their respective total factor productivity regardless of the market power indicators and instruments used. The paper also presents four examples which are consistent with this causal result suggesting that the relationship between market power and productivity needs to be analyzed on a case-by-case basis considering the product development of sectors, the influence and activities of firms and economic groups in the domestic economy and foreign markets, and the level of development of the country's productive structure.
dc.format.extent69
dc.identifier.doihttp://dx.doi.org/10.18235/0013470
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Productivity-and-Market-Power-The-Case-of-Manufacturing-Firms-of-Peru-2002-2019.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectSmall Business
dc.subjectProductivity
dc.subjectManufacturing Industry
dc.subjectCompetitiveness
dc.subjectLabor
dc.subjectDebtor Finance
dc.subjectForest Resource
dc.subjectIndustry
dc.subject.jelcodeD24 - Production • Cost • Capital • Capital, Total Factor, and Multifactor Productivity • Capacity
dc.subject.jelcodeL11 - Production, Pricing, and Market Structure • Size Distribution of Firms
dc.subject.jelcodeL60 - Industry Studies: Manufacturing: General
dc.subject.keywordsMarket power;total factor productivity;Causal machine learning
idb.identifier.pubnumberIDB-WP-01684
idb.operationRG-K1198
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