o:29179 Market concentration and profitability the empirical evidence from Serbian manufacturing industry en Abstract The impact of market concentration on profitability is a controversial question in industrial organization without a clear answer. The aim of the research is to investigate this prospective impact in the context of Serbian manufacturing industry. The main hypothesis of the research is that the increase in market concentration increases the profitability in the markets, due to the collusion of the dominant companies. We test this hypothesis by defining, estimating and testing the model describing the impact of structural and other control variables on market profitability by using secondary panel data for 122 markets, observed in 2015 and 2017. We obtained the data from 30 037 financial reports of the manufacturing industry companies. The model was estimated by using an error component two stage least squares estimator (EC2SLS). The results indicate a statistically significant positive impact of market concentration on profitability, empirically supporting the traditional market power hypothesis. Key words: market concentration, profitability, competition, collusion, manufacturing 1552099 10.18045/zbefri.2019.1.213 1552101 1331-8004 2023-05-08T14:06:53.960Z 44 no 46 Radovan Kastratović Univerzitet u Beogradu Ekonomski fakultet 54116873 0000-0002-6138-906X Dragan Lončar Univerzitet u Beogradu Ekonomski fakultet person 12931431 0000-0002-7883-6567 Siniša Milošević person application/pdf 976232 https://phaidrabg.bg.ac.rs/o:29179 no yes 18 70 92000001 11A03 Zbornik Radova Ekonomskog Fakulteta u Rijeci 37 1 213 233 2019