Market Power in Manufacturing and Services Industries

Abstract

This study analyzes the extent of the market power of the manufacturing and services industries in Portugal over the last decade. The results show that Portuguese industries are mostly operating under imperfect competition. Mark-ups are heterogeneous across industries, with services having higher mark-ups on average than manufacturing. The apparel and the administrative activities industries have the highest mark-ups; in turn, the food and the beverages industries have the lowest mark-ups, while the rubber and plastics industry seems to operate under competitive conditions. There is therefore room for improving product market competition in Portugal.

Keywords

• Mark-up ratio
• Market power
• Manufacturing
• Services
• Portugal