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Competition and Industry Performance: A Panel VAR Analysis in Indian Manufacturing Sector

Author

Listed:
  • Jhuma Mukhopadhyay

    (University of Calcutta)

  • Indrani Chakraborty

    (Institute of Development Studies Kolkata)

Abstract

This study tries to investigate the relationship between competition and performance in a dynamic framework in the post liberalisation era with the help of Structure Conduct Performance paradigm. By employing panel VAR estimation procedure on 23 Indian manufacturing industries that comprise of BSE listed manufacturing firms, the study finds that Structure Conduct Performance paradigm does not always hold true in Indian manufacturing scenario in the post liberalisation period. This might be because with the introduction of competition in the market, the larger firms are still practising anticompetitive strategies to have a control over the market. The relationship between performance and conduct indicates that competition has not fully succeeded in eliminating the imperfections from the market.

Suggested Citation

  • Jhuma Mukhopadhyay & Indrani Chakraborty, 2017. "Competition and Industry Performance: A Panel VAR Analysis in Indian Manufacturing Sector," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 15(2), pages 343-366, June.
    • Handle: RePEc:spr:jqecon:v:15:y:2017:i:2:d:10.1007_s40953-016-0055-2
    DOI: 10.1007/s40953-016-0055-2
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    More about this item

    Keywords

    Structure-Conduct-Performance paradigm; Industry performance; Panel VAR; Competition; India;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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