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This research investigates the relationship between industrial concentration and price-cost margin of the micro and small enterprises (MSEs) in the Indonesian food and beverages industry. This research uses the survey data of the MSEs from the Bureau of Central Statistic during the period from 2011 to 2014. This research uses panel data econometrics to estimate the relationship between the variables. This research found that there is a low industrial concentration of the MSEs in the Indonesian food and beverages industry. In spite of this, there is a positive average price-cost margin of the MSEs in the industry. The industrial concentration affects negatively the price-cost margin which suggests the policy maker to increase the size of the MSEs to gain more efficiency.

Industrial Concentration and Price-cost Margin of the Micro and Small Enterprises In the Indonesian Food and Beverages Industry