Characteristics of Marble Industry in Egypt: Structure, Conduct, and Performance

This paper analyzes marble extraction and production in Egypt from an applied industrial economics point of view. The marble industry in Egypt could be a promising sector if regulated properly. Market structure, conduct and performance is analyzed including degree of differentiation, nature of competition, barriers to entry, and needed regulations. Technically, production matches increasing returns of a Cobb Douglas form Q(K,L)= (K power 0.89)*(L power 1.33) while cost structure follows declining average cost with entry C(Q)=gamma*(Q power -0.55) . Factor inputs in production are non-complementary with $1000 of capital substitutable by 7.5 units of labor. Efficiency concerns necessitate deep technological segmentation with declining profitability. Critically needed regulations are related to technological use in extraction and labor allocation in production. For higher efficiency, the industry should become more capital intensive even though the Egyptian economy is undeniably labor abundant.