Abstract Changes in industrial concentration reflect efficiency and market power. The paper uses NEIO method to construct theoretical framework by introducing conjectural variation derived enterprises optimization equation. After transition enterprises optimization equation to industry lever we separate oligopoly-power and scale economy effects of changes in industrial concentration. Using ML method to estimate structure model, the paper computers conjectural variation oligopoly-power and cost elasticity of sample industries. Empirical results indicates that concentration lows 60% industries price because of scale economy effects, but oligopoly-power effects either dominates cost efficiency or reinforce inefficiency resulting higher prices in most industries.
2016, Vol. 33 
