Working Paper Series

ICE WP#2024-002

How Do Large Epidemics Redistribute Market Power? Evidence from the 2003 SARS Shock in China
⼤规模疫情会如何重新分配市场⼒量? 来⾃ 2003 年中国“⾮典”冲击的证据

March 13, 2024

by Yating Jiang, Hongsong Zhang

The Review of Economics and Statistics, conditionally Accepted


Market power is costly to build and, once established, it is typically persistent and difficult to change. This paper investigates the impact of large economic shocks (serious epidemics) on the redistribution of market power in manufacturing industries. Our model of firms’ dynamic decisions on production, pricing, and inventory demonstrates the importance of inventory stock and demand uncertainty to understand market power and implies a new measure of market power. We find that the 2003 SARS shock in China significantly reduced the market power of firms in the SARS-impacted areas, relative to others. The effect is long lasting. SARS also substantially increased the inventory and demand uncertainty of SARS-affected firms relatively, which contributed partially to the redistribution of market power.


市场势力建立的过程缓慢且成本高昂,但一经确立,往往具有长久的持续性并且很难被削弱。本文研究了外生经济冲击对制造业企业的市场势力再分配的影响。通过构建一个企业生产、定价和库存决策的动态模型,本文展示了企业库存变动和需求不确定性对理解其市场势力的重要性,并提出了企业在面临需求不确定和库存变化情形下的成本加成的有效测度方法。我们发现, SARS冲击显著降低了受影响地区企业的市场势力。这种影响具有持久性。SARS也显著增加了受影响企业的库存和需求不确定性,这两者的变化在重塑市场势力格局的过程中起到了重要的作用。

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