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DO SMALL FIRMS' PRICE-COST MARGINS FOLLOW THOSE OF LARGE FIRMS?

Yvonne M. Prince

EIM Small Business Research and Consultancy, Zoetermeer Centre for Advanced Small Business Economics, Erasmus University, Rotterdam

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A. Roy Thurik,

A. Roy Thurik

EIM Small Business Research and Consultancy, Zoetermeer Centre for Advanced Small Business Economics, Erasmus University, Rotterdam

We gratefully acknowledge financial support from the Netherlands Organization for Scientific Research (NWO).

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Yvonne M. Prince,

Yvonne M. Prince

EIM Small Business Research and Consultancy, Zoetermeer Centre for Advanced Small Business Economics, Erasmus University, Rotterdam

Search for more papers by this author

A. Roy Thurik,

A. Roy Thurik

EIM Small Business Research and Consultancy, Zoetermeer Centre for Advanced Small Business Economics, Erasmus University, Rotterdam

We gratefully acknowledge financial support from the Netherlands Organization for Scientific Research (NWO).

Search for more papers by this author

First published: October 1995

https://doi.org/10.1111/j.1467-8586.1995.tb00618.x

Citations: 2

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ABSTRACT

The paper investigates the extent to which small firms' price-cost margins follow those of large firms. A two-equation model is used with data for 36 Dutch three-digit manufacturing industries over the period 1975–86. The effects of market structure characteristics are also examined. The main result is that small firms (10-50 employees) appear to have the freedom to set prices above cost independently of larger firms in the same industry.

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Volume47, Issue4

October 1995

Pages 321-327

DO SMALL FIRMS' PRICE-COST MARGINS FOLLOW THOSE OF LARGE FIRMS?

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DO SMALL FIRMS' PRICE-COST MARGINS FOLLOW THOSE OF LARGE FIRMS?

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