Test Of Structure-Conduct-Performance And EfficientStructure Hypotheses In Sugar Industry Of Pakistan

Yıl 2018, Cilt: 25 Sayı: 3, 913 - 923, 28.12.2018

Samina Begum

https://doi.org/10.18657/yonveek.337949

Cited By: 1

Öz

In this study the validity of
Structure-Conduct-Performance (SCP) and efficient-structure (ES) hypotheses is
empirically tested in the sugar industry of Pakistan. The data set consists of
the 29 sugar mills registered at the Karachi Stock Exchange (KSE) for the
financial year 2011. To test the relation of market power, efficiency and
performance, we used market concentration and market share as the measurement
of market power. In addition, the DEA method to measure firm’s efficiency,
while ROE is used as an indicator of performance and three control variables.
The result of this study support the traditional SCP hypothesis and indicates
that there is positive and significant relation between market concentration
and performance, while Reject the ES hypothesis.

Anahtar Kelimeler

Structure-Conduct-Performance, Efficient-structure, Data Employment analysis, Sugar industry

Test Of Structure-Conduct-Performance And Efficient-Structure Hypotheses In Sugar Industry Of Pakistan

Öz

In this study the validity of
Structure-Conduct-Performance (SCP) and efficient-structure (ES) hypotheses is
empirically tested in the sugar industry of Pakistan. The data set consists of
the 29 sugar mills registered at the Karachi Stock Exchange (KSE) for the
financial year 2011. To test the relation of market power, efficiency and
performance, we used market concentration and market share as the measurement
of market power. In addition, the DEA method to measure firm’s efficiency,
while ROE is used as an indicator of performance and three control variables.
The result of this study support the traditional SCP hypothesis and indicates
that there is positive and significant relation between market concentration
and performance, while Reject the ES hypothesis.

Anahtar Kelimeler

Structure-Conduct-Performance, Efficient-structure, Data Employment analysis, Sugar industry

Kaynakça

• Abbot, J.C. and Makeham, J.P., 1981. Agricultural Economics and Marketing in the Tropics. Wing Tai Cheung Printing Co. Ltd, Rome. 58p.
• Aleksandrova, A. & Lubys, J., 2004. Application of the Structure- Conduct- Performance Paradigm in a Transition Economy: Explaining Reported Profitability of the Largest Latvian Firms. SSE Riga Working Papers, 8(63).
• Bain J., 1956. Barriers to New Competition. Harvard University Press, Cambridge, MA.
• Bain, J., 1951. Relation of Profit Rate to Concentration: American Manufacturing,1936-1940. Quarterly Journal of Economics, 65(3), 293–324.
• Bain, J., 1972. Essays in Price Theory and Industrial Organization. Little, Brown, Boston.
• Baker, J. B. and Woodward, P. A., 1998. Market power and the cross-industry behavior of prices around a business cycle trough. Working Paper No. 221, Bureau of Economics, Federal Trade Commission.
• Bayyurt, N., & DUZU, G., 2008. Performance Measurement of Turkish and Chinese Manufacturing firms: A comparative Analysis. Eurasian Journal of Business and Economics 1(2), 71-83.
• Berger,A.N. and T.H.Hannan, 1989. “The price-concentration relationship in banking”. Review of Economics and Statistics, 71(2), 291–299.
• Carlton, D. W. and Perlo , J. M., 1994. Modern Industrial Organization, 2nd edn, Harper Collins College Publishers, New York.
• Cetorelli, N., Gambera, M., 2002. Banking Market Structure, Financial Dependence and Growth: International Evidence from Industry Data. The Journal of Finance 56, 617-648.
• Charnes, A., Cooper, W. W., & Rhodes, E., 1978. Measuring the efficiency of decision making units. European Journal of Operational Research, 2, 429-444
• Clarke, R., 1984. 'Profit Margins and Market Concentration in U.K.Manufacturing Industry', Applied Economics. 16, 57-71.
• Clarke, R., 1985. Industrial Economics. Basil Blackwell, New York.
• Clodius, R. L. and W. F. Muller, 1961. Market structure analysis as an orientation for research in Agricultural Economics. Journal of Farm Economics. 513-546.
• Comanor, W.S. and T.A. Wilson, 1967. Advertising, Market Structure and Performance', Review of Economics and Statistics, 49, 423-440.
• Comanor, W.S. and T.A. Wilson, 1974. Advertising and Market Power. Cambridge: Harvard University Press.
• Cooper, W.W., Seiford, L.M. & Tone, K., 2000. Data Envelopment Analysis: A Comprehensive Text with Models, Applications, References and DEA-Solver Software. Kluwer Academic Publishers, Boston, MA.
• Cowling K, Waterson M, 1976. Price-cost margins and Market Structure. Econ. 43, 267-274.
• Farell, M. J., 1957. The Measurement of Productive Efficiency. Journal of Royal Statistical Society, 120(2), 655-666.
• Gupta, V. K., 1983. A simultaneous determination of structure, conduct and performance in Canadian manufacturing, Oxford Economic Papers, 35, 281-301.
• International Sugar Organization, 2012: Sugar year book.
• Leitzinger, J.J., and K.L. Tamor, 1983. 'Foreign Competition in Antitrust Law', Journal of Law and Economics, 26, 392-415.
• Martin, S., 1979. Advertising, concentration, and profitability: the simultaneity problem. Bell J. Econ. 24, 197–201.
• Mason, E., 1939. Price and Production Policies of Large-Scale Enterprise. American Economic Review, 29(1), 61–74.
• Molyneux, P. and W. Forbes., 1995. “Market Structure and Performance in European Banking.” Applied Economics 27 (2), 155-159.
• Porter, M., 1980. Competitive strategy: techniques for analyzing industries and competitors, New York, NY: The Free Press.
• Porter, M.E., 1980. Competitive Strategy. Free Press, New York.
• Ravenscraft, D., 1980. Price-Raising and cost-reducing effects in profit concentration studies, PhD thesis, Northwestern University.
• Scarborough, V. and Kydd, J., 1992. Economic analysis of Agricultural Markets. A manual marketing series 5, chartham UK: Natural resource
• Scherer FM, Ross D., 1990. Industrial Market Structure and Economics Performance. Houghton Mifflin Company, Boston.
• Schmalensee, R., 1989. Inter-Industry Studies of Structure and Performance. In R. Schmalensee and R. D. Willlig (Eds.), Handbook of Industrial Organization, Vol. II, pp.952–1009. Amsterdam, New York, Oxford, Tokyo: North-Holland.
• Shepherd WG, 1990. The Economics of Industrial Organization, 3rd Ed. Prentice-Hall.
• Smirlock, M., T. Gilligan and W. Marshall, 1984. “Tobin’s Q and the structure-performance relation”. American Economic Review, 74, 1050-1060
• Wayne Fu, 2003. Applying the structure‐conduct‐performance framework in the media industry analysis, International Journal on Media Management, 5(4), 275-284