TY - JOUR

T1 - The Determination of Profit Margins in UK Manufacturing

AU - Conyon, Martin

AU - Machin, S

PY - 1991/6

Y1 - 1991/6

N2 - This paper examines the determinants of profit margins in 91 U.K. manufacturing industries over the period 1983-86. It considers how the inclusion of labor market characteristics in empirical Industrial Organization specifications affects the estimated concentration-margins relationship. The empirical work pays detailed attention to the endogenous nature of variables derived from structural Industrial Organization models. The authors report instrumental variables estimates of margins equations in which there emerges a significant role for labor market characteristics. Indeed, both unionization and industrywide unemployment are found to depress profit margins. The impact of concentration is seen to be biased downward when these variables are omitted.

AB - This paper examines the determinants of profit margins in 91 U.K. manufacturing industries over the period 1983-86. It considers how the inclusion of labor market characteristics in empirical Industrial Organization specifications affects the estimated concentration-margins relationship. The empirical work pays detailed attention to the endogenous nature of variables derived from structural Industrial Organization models. The authors report instrumental variables estimates of margins equations in which there emerges a significant role for labor market characteristics. Indeed, both unionization and industrywide unemployment are found to depress profit margins. The impact of concentration is seen to be biased downward when these variables are omitted.

M3 - Journal article

VL - 39

SP - 369

EP - 382

JO - Journal of Industrial Economics

JF - Journal of Industrial Economics

IS - 4

ER -