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Periodical article | Leiden University catalogue | WorldCat |
Title: | Market Power and Mark-Ups: Manufacturing Industry in Zimbabwe |
Author: | Bennell, Paul |
Year: | 1992 |
Periodical: | Eastern Africa Economic Review |
Volume: | 8 |
Issue: | 2 |
Pages: | 135-141 |
Language: | English |
Geographic term: | Zimbabwe |
Subjects: | industry market Development and Technology Economics and Trade |
Abstract: | Semi-autarchy following the imposition of sanctions in the wake of the Smith government's unilateral declaration of independence (UDI) in November 1965, coupled with the limited size of the domestic market, accelerated the development in Rhodesia of a manufacturing industry that continues to be dominated by monopolies and oligopolies in most product markets. Surprisingly, however, the standard measure of market power, namely concentration ratios, has never been computed. The first section of this article thus presents four and one-firm concentration ratios for all ISIC four-digit manufacturing industries in Zimbabwe. These have been calculated for two separate years: 1970, when UDI sanctions were fully in place, and 1986, six years after Zimbabwe had attained political independence. Given the monopolistic and oligopolistic market structure of most manufacturing production, both the Smith and, until recently, the Mugabe governments relied on price controls on a range of commodities in order to control monopoly rents. Once again, no comprehensive research has been undertaken to determine the profitability of manufacturing enterprises in Zimbabwe and, in particular, the extent to which enterprise profitability has been linked with market power. Accordingly, the second section of the article presents data on the profitability of four-digit ISIC manufacturing industries. The third section then examines the extent to which profitability, as proxied by prime cost markups, was correlated with the market power enjoyed by manufacturing industries in the mid-1980s. Notes, ref. |