On the examination of non-linear relationship between market structure and performance in the US manufacturing industry

This paper attempts to investigate the causal link between market structure and industry performance using a micro panel data set of USA manufacturing industries over the period 1958-2007. We employ a novel panel GMM model strongly accounting for endogenous regressors and threshold variable. The empirical findings denote the existence of a non-monotonic relationship between market structure and total-factor productivity (TFP). Our findings call for future research on the impact of market structure on consumer welfare.