Market power is costly to build and, once established, is typically persistent and difficult to change. This paper investigates the impact of large economic shocks (serious epidemics) on the redistribution of market power in manufacturing industries. Using a model of firms’ dynamic decisions on production, pricing, and inventory holding, we demonstrate the importance of inventory stock and demand uncertainty in understanding market power and propose a new measure of market power. We find that the 2003 SARS shock in China significantly reduced the market power of firms in SARS-impacted areas. This effect is long lasting. SARS also substantially increased the inventory of affected firms, which partially contributed to the redistribution of market power.

This paper examines the impacts of technology training and buyer-supplier relationship on technology adoption and quality upgrading. We randomly varied subjects of each training group across farmer-exporter clusters—farmers, exporters, both, or none—and provided training on Good Agricultural Practices (GAP). We find that training farmers enhances technology adoption and quality upgrading. Yet, the effects are much stronger when farmers and exporters are trained together. We document a plausible mechanism to explain this finding: joint training improves buyer-supplier relationship, which facilitates contract trade between farmers and exporters. We find no effect of GAP certification eligibility on technology adoption.