Journal of Regulation Studies 2023 KCI Impact Factor : 0.78
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pISSN : 1738-7132
- https://journal.kci.go.kr/ksrs2002
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Mergers and Acquisitions and the Competition in Korean Cement Industry: Focusing on the 2010s
- Journal of Regulation Studies
- 2021, 30(2), pp.69-109
- DOI : 10.22954/ksrs.2021.30.2.004
- Publisher : 한국규제학회
- Research Area : Social Science > Public Administration
- Received : September 29, 2021
- Accepted : November 12, 2021
- Published : December 31, 2021
1고려대학교
Accredited
ABSTRACT
This study analyzes the Korean cement market competition in the 2010s, when mergers and acquisitions across firms was active. We divided the cement market into the Portland Cement Market and the Entire Cement Market including portland cement and slag cement, derived marginal costs per unit of each market by classifying production costs for each item of cement firms, estimated the demand function of each market suggested by Steen and Salvanes(1999), and derived the price elasticity of demand by annual. Based on it, we analyzed the competitiveness of the cement market in the 2010s by obtaining the elasticity-adjusted Lerner index. As a result of the analysis, the Portland Cement Market is comparable to Cournot equilibrium with 1 to 2 identical firms, and the increment of the elasticity-adjusted Lerner index after the mergers and acquisitions was less than 0.1. As a result, it was judged that the mergers and acquisitions across cement firms in the 2010s was their attempt to restore the profitability to the level before the price war in response to worsening profitability due to the the price war among the firms in the 2000s. In the analysis of the Entire Cement Market, it was analyzed that the market was comparable to Cournot equilibrium with 2 to 3 identical firms. This implies that the market's average collusiveness of conduct is similar or somewhat lower than that of the Portland Cement Market.
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