Journal of the Japanese and International Economies
, 424–450 (1999)Article ID jjie.1999.0430, available online at http://www.idealibrary.com on
Determinants of Individual-Firm Markup in Japan: MarketConcentration, Market Share, and FTC Regulations
Institute of Economic Research, Kyoto University, Yoshida-Honmachi, Sakyo-ku,Kyoto 606-8501, Japan
Institute for Social and Economic Research, Osaka University
andKiyohiko G. Nishimura
Faculty of Economics, University of Tokyo
Received February 7, 1999; revised July 13, 1999
—DeterminantsofIndividual-Firm Markup in Japan: Market Concentration, Market Share, and FTC RegulationsThispaperestimatesindividualﬁrmlevelmarkupformorethan400majormanufacturingﬁrms in Japan. Our estimates suggest the presence of signiﬁcant market power for most of these ﬁrms, due not only to market concentration but also to the ﬁrms’ own market shares,as well as advertizing and sales promotion efforts. The paper then goes on to assess system-atically the impact on estimated markups of regulatory measures taken by the Fair TradeCommission (FTC) of the Japanese Government. We ﬁnd that non-punitive FTC activitiesare directed toward the right targets and are reasonably effective, whereas injunctions, thestrongest measure endowed to the FTC, has essentially no effect on the markups of ﬁrmsin our sample.
J. Japan. Int. Econ.
, Dec. 1999,
(4), pp. 424–450. Institute of EconomicResearch, Kyoto University, Yoshida-Honmachi, Sakyo-ku, Kyoto 606-8501, Japan; In-stitute for Social and Economic Research, Osaka University; and Faculty of Economics,University of Tokyo.
1999 Academic Press
Journal of Economic Literature
Classiﬁcation Numbers: L13, L41.
An earlier version of the paper was presented at the NBER-CEPR-TCER Conference on Competi-tion Policy, December 18–19, 1998, International House, Tokyo, Japan. We beneﬁted from commentsby Professors Tim Bresnahan and Noriyuki Yanagawa and other participants of the conference. Theresearch reported here is partially supported by a Grant-in-Aid from the Ministry of Education.4240889-1583/99 $30.00
1999 by Academic PressAll rights of reproduction in any form reserved.