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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Mark-Up Pricing in South African Industry
Authors:Fedderke, JohannesISNI
Kularatne, ChandanaISNI
Mariotti, MartineISNI
Periodical:Journal of African Economies
Geographic term:South Africa
Economics and Trade
External link:https://jae.oxfordjournals.org/content/16/1/28.full.pdf
Abstract:This paper investigates the extent of the mark-up of South Africa's manufacturing sector, taking into account a number of characteristics of its component industries. It finds significant mark-ups to be present in the South African manufacturing sector. In comparative terms, the mark-up is approximately twice that found for the US manufacturing sector. The paper shows that industry concentration exerts a positive influence on the mark-up over marginal cost while an indicator of competitiveness suggests that an increase in an industry's competitiveness relative to other industries allows it to raise its mark-up. However, within-industry increases in competitiveness reduces the mark-up. The paper also analyses the impact of import and export penetration. Both import and export penetration serve to lower the mark-up. The impact of the business cycle on mark-up indicates that the mark-up is countercyclical. Finally, accounting for intermediate inputs significantly lowers the absolute size of the mark-up, controlling for the industry's concentration ratio. However, relative to findings on the US manufacturing industries, South African manufacturing mark-ups remain approximately twice as large. Bibliogr., notes, ref., sum. [Journal abstract]