Heterogeneities within Industries and Structure-Performance Models
AbstractThis paper tests whether the results from standard structure-conduct-performance [SCP] models estimated at the industry level are sensitive to the degree of heterogeneity of the firms in the industries. Industries are separated into homogeneous and heterogeneous categories depending on whether the profit rates of firms within an industry converge on a common value or not. In "homogeneous" industries we find that both the long-run projected returns on assets for the industries and Bureau of Census price-cost-margins are well explained by variables usually included in SCP models, as in particular industry concentration. In contrast, few if any of the usual SCP-model variables are statistically significant in the regressions for heterogeneous industries. JEL classification:
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Bibliographic InfoPaper provided by Oesterreichische Nationalbank (Austrian Central Bank) in its series Working Papers with number 36.
Length: 30 pages
Date of creation: 21 Dec 1998
Date of revision:
Postal: Oesterreichische Nationalbank, Economic Studies Division, c/o Beate Hofbauer-Berlakovich, POB 61, A-1011 Vienna, Austria
Other versions of this item:
- Dennis Mueller & Burkhard Raunig, 1999. "Heterogeneities within Industries and Structure-Performance Models," Review of Industrial Organization, Springer, vol. 15(4), pages 303-320, December.
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