Entry barriers and markup ratios: Evidence from OECD countries

This article examines the effects of industrial natural entry barrier and country entry regulation on industrial markups for 13 OECD countries. We find that markup ratios are high in industries with high natural entry barrier and in countries with high-entry regulation. In addition, markups are high in high natural entry barrier industries in high-entry regulation countries. However, all these effects are not significant, thus implying that entry barrier may not have a strong effect on the market power or profitability.