PUBLICATIONS & REPORTS

Contents Introduction

This paper first explains how production concentration, foreign ownership, and exporting have increased in most Thai manufacturing industries during the decade beginning in 1996, just before the economic crisis of 1997-1998. Second, it analyzes the determinants of changes in producer concentration at the industry level, highlighting the weak influence of majority-foreign ownership shares on these changes. It also shows how concentration tended to fall in industries with relatively high import protection, but this correlation was also weak. In contrast, there was a stronger tendency for concentration to rise in industries where shares of intra-industry conglomerates were relatively large in the initial year, although changes in conglomerate shares were not strongly correlated with changes in concentration. Third, incumbent firms, which were also among the largest firms in their respective industries in both years, had a strong tendency to be conglomerate members in both years, and a weak tendency to be majority-foreign owned in 1996, but not 2006. Exporting firms did not have a strong tendency to be among the largest firms, however. Firms that exited or entered samples of the largest firms between 1996 and 2006 did not have a strong tendency to be conglomerate members, majority-foreign owned, or exporters. Thus, potential market power was most common among incumbent conglomerate members and may have existed in some incumbent majority-foreign firms. However, foreign ownership and international trade activities generally had relatively weak effects on concentration and thus on potential market power.