The specifications and testing of structure-conduct-performance relationships in Australian manufacturing

TL;DRAbstract

Beginning with Mason (1939) and then continuing perforce with Bain (1956 and 1968) into the early 1970s, research in the mainstream of industrial organisation (10) was dominated by the structure-conduct-performance paradigm. The paradigm relates an industry's structural characteristics to the conduct patterns of its constituent firms, which determines an industry's performance. Specification of the relationships in this area is often largely ad hoc and its testing is subject to a number of difficulties. Considering an equilibrium oligopoly framework, mainly based on Cowling and Waterson (1976) study, the thesis derives short-run equilibrium profit, concentration and industry conjectures models. The empirical analysis will consist of two parts. Firstly, the above three equilibrium models are tested with different versions both in linear and logarithmic functional forms. Empirical testings includes testing the major criticisms against structure-conduct-performance studies with the profit

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