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Market structure of China's construction industry based on the Panzar-Rosse model

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  • Bingsheng Liu
  • Xueqing Wang
  • Yuan Chen
  • Yinghua Shen

Abstract

The structure-conduct-performance (SCP) paradigm posits that market structure determines market performance, and the generally low productivity of China's construction industry is a reflection of the irrationality of its market structure. Currently, the main approaches for measuring market structure can be classified as either structural approaches or non-structural approaches. Because the statistical data on structural approaches is one-sided, the indicators for the Panzar-Rosse model (a non-structural approach) for the construction industry can be selected by examining the Panzar-Rosse model and comparing the characteristics of the construction industry with those of the banking industry. The Panzar-Rosse model is employed to assess the market structure of 21 listed companies in China's construction industry during the period from 2009 to 2011. The analysis revealed that China's construction industry operates under conditions of monopolistic competition with free-entry equilibrium. The methods and results of the research are expected to contribute to the advancement of theories related to and methods of analysing the market structure of industries other than the banking industry.

Suggested Citation

  • Bingsheng Liu & Xueqing Wang & Yuan Chen & Yinghua Shen, 2013. "Market structure of China's construction industry based on the Panzar-Rosse model," Construction Management and Economics, Taylor & Francis Journals, vol. 31(7), pages 731-745, July.
  • Handle: RePEc:taf:conmgt:v:31:y:2013:i:7:p:731-745
    DOI: 10.1080/01446193.2013.817679
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    File URL: http://hdl.handle.net/10.1080/01446193.2013.817679
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    Cited by:

    1. Hong, Jingke & Li, Clyde Zhengdao & Shen, Qiping & Xue, Fan & Sun, Bingxia & Zheng, Wei, 2017. "An Overview of the driving forces behind energy demand in China's construction industry: Evidence from 1990 to 2012," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 85-94.

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