Review of Contemporary Business Research

Market Power, Cost Efficiency and Firm Performance in the Post-Crisis Era
Theodore Papadogonas, Sfakianakis George, Voulgaris Fotini

Abstract
International evidence on whether market power or cost efficiency is the key determinant of firm performance is still inconclusive. In this paper we attempt to analyse empirically the relationship of profitability, market power and cost efficiency under conditions of economic turmoil. We use a large longitudinal data set of manufacturing firms in Greece for the 2004 – 2011 period, placing special emphasis on the distinction between the precrisis (2003-2007) and the post-crisis (2008-2011) period. The results suggest that, so far, the economic crisis had a statistically significant impact on the tested relationship, changing the balance in favour of cost efficiency as an important determinant of profitability.

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