Mark-ups in the Hungarian Corporate Sector

Abstract

One of the major tasks facing a transition economy is to create the competitive environment of a properly functioning market economy. This paper attempts to analyze the relationship of market structure, market imperfections and corporate performance by mark-up pricing. There is clear evidence for the existence of such market imperfections. However, these imperfections cannot be attributed to one single factor. We develop a varying coefficient model for the relationship between the factors facilitating rent-collection and the sectoral mark-ups.