Is there more than one critical concentration ratio? An empirical test for the Portland cement industry
Past attempts to estimate the critical concentration ratio maintained the hypothesis of only two structural groupings: competitive versus non-competitive. In view of the spectrum of competitive conduct allowed by oligopoly theory, the validity of the two groupings is restrictive and should be tested. Using data from the Portland cement industry, this paper conducts such a test, employing a non-linear switching regression technique based on the logistic function. The hypothesis of two structural groupings is not rejected.