International trade performance and concentration in British industry

Abstract This paper reports the results of a cross-sectional analysis for 97 industries at the Minimum List Heading level, of their international trading performance 1970–77 and the influence of industrial structure on this. It is shown that, on average, import penetration increased faster than the export ratio for the industries analysed. Investigation of the relationship between industrial concentration and international trade suggest that in the majority of the analyses, especially where the relation between prior concentration change and subsequent with a performance was concerned, higher or increasing levels of concentration were associated with a weaker international trade performance. On the basis of this it is argued that more attention needs to be paid to international trade as a performance rather than merely a structural phenomenon in industry, the reasons for the relatively disappointing performance need to be investigated in more detail, the risk of a decline in internaional trade performance needs to be taken into account in formulating competition policy, especially with respect to mergers and the investigation of dominant firms.