Mark-up pricing in South African industry

Johannes Fedderke, Chandana Kularatne, Martine Mariotti

Research output: Contribution to journalArticle

33 Citations (Scopus)

Abstract

This paper investigates the extent of the mark-up of the South African manufacturing sector, taking into account a number of characteristics of its component industries. We find 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. We find 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. We also analyse 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, SA manufacturing mark-ups remain approximately twice as large.

Original languageEnglish (US)
Pages (from-to)28-69
Number of pages42
JournalJournal of African Economies
Volume16
Issue number1
DOIs
StatePublished - Jan 1 2007

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pricing
industry
manufacturing
manufacturing sector
competitiveness
import
penetration
marginal costs
business cycle
manufacturing industry
Mark-up pricing
Africa
Industry
Markup
cost
Competitiveness
Manufacturing sector

All Science Journal Classification (ASJC) codes

  • Development
  • Economics and Econometrics

Cite this

Fedderke, Johannes ; Kularatne, Chandana ; Mariotti, Martine. / Mark-up pricing in South African industry. In: Journal of African Economies. 2007 ; Vol. 16, No. 1. pp. 28-69.
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Mark-up pricing in South African industry. / Fedderke, Johannes; Kularatne, Chandana; Mariotti, Martine.

In: Journal of African Economies, Vol. 16, No. 1, 01.01.2007, p. 28-69.

Research output: Contribution to journalArticle

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