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Issues in Business Management and Economics
Vol.4 (4), pp. 41-46, June 2016
ISSN 2350-157X
Available online at https://www.journalissues.org/IBME/
DOI:http://dx.doi.org/10.15739/IBME.16.006
Article ID /BM/16/031/06 pages
Author(s) retain the copyright of this article. Author(s) agree that this article remain permanently open access under the terms of the Creative Commons Attribution License 4.0 International License.



Review

Market power and competition: Some implications for Nigeria’s economy

C. Chris Ofonyelu

Department of Economics, Adekunle Ajasin University, Akungba Akoko, Ondo State, Nigeria.

Author’s Email: ofonyelu1@gmail.com; chijioke.ofonyelu@aaua.edu.ng



date Received: April 4, 2016     date Accepted: May 29, 2016     date Published: June 22, 2016


 Abstract

The usage of market power by strong firms to compete against the weaker ones, sustain higher profits and deter entrants has become a common practice in many markets. This suggests that there is a link between market power possessions, firm concentration and competition. By examining the operations of the flour, sugar and palm olein vegetable oil companies in Nigeria, this study observed a positive relationship between market power possession and competition. Firms with market power stands at advantage during competition. The possession of market power aids attainment of higher profits, investment in capacity utilization and economic growth. Increase in competition was a major factor responsible for the growing firm concentration in Nigeria. The study suggests increased firm concentration and acquisition of idle capacities as part of the future implications for the economy.

JEL Classifications: D22, L16, M13


Key words: Industrial concentration, market power, competition, efficiency


Ofonyelu