1. BRAZILIAN INTERSTATE PASSENGER TRANSPORTATION INDUSTRY: CONCENTRATION AND RETURNS Carlos Henrique Rocha Francisco Giusepe Donato Martins Taylor Montedo Machado Brasília University (UnB) - Brazil

2. Motivation The economic literature postulates that to the extent that an industry is concentrated it will tend to exhibit relatively higher returns on invested capital.

3. Paper’s purpose This research paper investigates if the Brazilian interstate passenger transportation industry concentrating strategy is leading to a higher return on invested capital. The investigation will be done through the OLS method.

4. Theoretical Background The analysis of the concentration levels of an industry should comprehend the study of the connections among the firms by cross-checking. The most common methods to measure concentration are concentration ratio (CR) and the Hirschman- Herfindahl index (HHI). Measures of concentration aim to detect how economic agents dominate a given industry, taking into consideration the market share, or other measures of size.

5. Coach Service: an overview

7. The Model To Be Tested,,

8. Empirical Analysis

10. Final Considerations The central focus of the paper is on the relationship between returns on investments and concentration ratio in Brazilian interstate passenger transportation industry. A cross-section model was estimated in order to verify such relationship. The empirical evidence reported here show that firms with higher concentration ratio present higher returns on invested capital.

11. Final Considerations Finally, we should say that we have extended this study tacking into account firm’s size. The empirical evidence reported in such new study has shown that indeed there is a strong relationship between concentration and returns on invested capital in the industry, but only in large firms. That is, there is no proof of concentration and return on capital in small and medium firms.