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The Effects of European Competition Policy on Pricing and Profit Margins
Author(s) -
Feinberg Robert M.
Publication year - 1986
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1986.tb00771.x
Subject(s) - german , west germany , profit margin , economics , competition (biology) , profit (economics) , competition policy , empirical evidence , international economics , industrial organization , international trade , microeconomics , economic history , finance , history , ecology , philosophy , archaeology , epistemology , european union , biology
SUMMARY This paper analyzes the effects of EEC and West German policy towards horizontal agreements and restrictive practices on the performance of the West German manufacturing sector. Three empirical studies are reported: (1) a time‐series study of price indexes for 10 products from the mid‐1950's to the present; (2) a cross‐section study (for 1979 data) of 106 industries; and (3) an analysis of changes in company profit margins over time. The results suggest some short‐run response to antitrust cases, but no long‐lasting ‘deterrent’ effect. There is some evidence of a ‘regime effect’ occurring after 1957, i. e., a general price decline in West German industry due to changes in the competitive environment which started in that year.