Markets, corporate behaviour and the state pp 3-18

Part of the Nijenrode Studies in Economics book series (NIEC, volume 1)

| Cite as

The Determinants of Market Structure: Design for Research

  • Richard E. Caves

Abstract

Research in the field of industrial organization has made great progress during the past twenty years with the statistical testing of hypotheses about the effects of the structures of markets on their social performance. Concentrating principally on allocative efficiency (but also on some aspects of technical efficiency and progressiveness), researchers have confirmed a number of elements of market structure predicted by the theory of markets as significant determinants of performance. Allocative efficiency, measured by the price-cost margin or rate of return on investment, has been related to seller concentration, the various components of barriers to entry, the rate of growth of demand, the incidence of fixed costs, the extent of import competition, the extent of firms’ diversification, the structure of distribution channels, the subgroup organization of competing sellers, etc. Although most of this research has dealt with the United States economy, at least some of these structure-performance hypotheses have been confirmed for several other industrial countries as well, indeed, in one test the structure of these relations proved to be identical between two countries, the United Kingdom and United States (Khalilzadeh-Shirazi, 1973, chapter 3). The conventional structure-performance relations have gained strong statistical confirmation even in economies such as France and Japan where one might expect intervening private institutions and public policies to overwhelm them.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    Armstrong, Alan, and Aubrey Silberston. ‘Size of Plant, Size of Enterprise and Concentration in British Manufacturing Industry, 1935–58,’ Journal of the Royal Statistical Society, Series A, 128 (Part 3, 1965 ), pp. 395–420.CrossRefGoogle Scholar
  2. 2.
    Bain, Joe S. Essays on Price Theory and Industrial Organization. Boston: Little, Brown, 1972.Google Scholar
  3. 3.
    Bain, Joe S. Industrial Organization. Rev. ed.; New York: Wiley, 1968.Google Scholar
  4. 4.
    Bain, Joe S. International Differences in Industrial Structure: Eight Nations in the 1950s. Studies in Comparative Economics, No. 6. New Haven: Yale University Press, 1966.Google Scholar
  5. 5.
    Balassa, Bela. ‘Tariff Reduction and Trade in Manufacturers among the Industrial Countries,’ American Economic Review, 56 (June, 1966), pp. 466–473.Google Scholar
  6. 6.
    Caves, Richard E. International Trade, International Investment, and Imperfect Markets. Special Papers in International Economics, No. 10. Princeton: International Finance Section, Princeton University, 1974.Google Scholar
  7. 7.
    Caves, Richard E., with Masu Uekusa. Industrial Organization in Japan. Washington: Brookings Institution, forthcoming.Google Scholar
  8. 8.
    Coase, R. H. ‘Industrial Organization: A Proposal for Research,’ Policy Issues and Research Opportunities in Industrial Organization, ed. Victor R. Fuchs. New York: National Bureau of Economic Research, 1972, pp. 59–73.Google Scholar
  9. 9.
    Comanor, William S., and Thomas A. Wilson, ‘Advertising, Market Structure and Performance,’ Review of Economics and Statistics, 49 (November, 1967 ), pp. 423–440.Google Scholar
  10. 10.
    Doyle, P. ‘Advertising Expenditure and Consumer Demand,’ Oxford Economic Papers, 28 (November, 1968), pp. 395–416.Google Scholar
  11. 11.
    Edwards, Franklin R., and Arnold A. Heggestad. Market Structure, and Performance in Banking,’ Quarterly Journal of Economics, 87 (August, 1973 ), pp. 455–473.Google Scholar
  12. 12.
    Evely, Richard, and I. M. D. Little. Concentration in British Industry. Cambridge: Cambridge University Press, 1960.Google Scholar
  13. 13.
    Gale, Bradley T. ‘Market Share and Rate of Return,’ Review of Economics and Statistics, 54 (November, 1972), pp. 412–423.Google Scholar
  14. 14.
    Grossack, I. M. ‘The Concept and Measurement of Permanent Industrial Concentration,’ Journal of Political Economy, 80 (July/August, 1972 ), pp. 745–760.Google Scholar
  15. 15.
    Grubel, Herbert G. ‘Intra-Industry Specialization and the Pattern of Trade,’ Canadian Journal of Economics and Political Science, 33 (August, 1967 ), pp. 374–388.Google Scholar
  16. 16.
    Jacquemin, Alex. L’entreprise et son pouvoir de marché. Québec: Presses de l’Université Laval, 1967.Google Scholar
  17. 17.
    Jacquemin, Alex. ‘Market Structure and the Firm’s Market Power,’ Journal of Industrial Economics, 20 (April, 1972), pp. 122–134.Google Scholar
  18. 18.
    Jacquemin, Alex, and Jacques Thisse. ‘Recent Applications of Optimal Control Theory to Industrial Organization,’ Market Structure and Corporate Behaviour: Theory and Empirical Analysis of the Firm, ed. Keith Cowling. London: Gray-Mills Publishing, 1972, pp. 61–84.Google Scholar
  19. 19.
    Kamerschen, David R. ‘Market Growth and Industry Concentration,’ Journal of the American Statistical Association, 63 (March, 1968), pp. 228–241.Google Scholar
  20. 20.
    Khalilzadeh-Shirazi, Javad. Market Structure and Allocative Efficiency: Studies in U.K. and U.S. Manufacturing Industries. Unpublished Ph.D. dissertation, Harvard University, 1973.Google Scholar
  21. 21.
    Mann, H. M., J. Henning, and J. Meehan. ‘Advertising and Concentration: An Empirical Investigation,’ Journal of Industrial Economics, 16 (November, 1967 ), pp. 34–45.Google Scholar
  22. 22.
    Mansfield, Edwin. ‘Entry, Gilbrat’s Law, Innovation, and the Growth of Firms,’ American Economic Review, 52 (December, 1962 ), pp. 1023–1051.Google Scholar
  23. 23.
    Marcus, M. ‘A Note on the Determinants of the Growth of Firms and Gilbrat’s Law,’ Canadian Journal of Economics, 2 (November, 1969), pp. 580–589.Google Scholar
  24. 24.
    Mason, Edward S. ‘Price and Production Policies of Large-Scale Enterprise,’ American Economic Review, 29 (March, 1939 ), pp. 61–74.Google Scholar
  25. 25.
    Mueller, Willard F., and Larry G. Hamm. ‘Trends in Industrial Market Concentration, 1947 to 1970,’ Review of Economics and Statistics, 56 (November, 1974 ), pp. 511–520.Google Scholar
  26. 26.
    Nelson, Ralph L. Concentration in the Manufacturing Industries of the United States: A Midcentury Report. New Haven: Yale University Press, 1963.Google Scholar
  27. 27.
    Ornstein, S. I., et al. ‘Determinants of Market Structure,’ Southern Economic Review, 39 (April, 1973 ), pp. 612–625.Google Scholar
  28. 28.
    Orr, Dale. ‘The Determinants of Entry: A Study of the Canadian Manufacturing Industries,’ Review of Economics and Statistics, 56 (February, 1974), pp. 58–66.Google Scholar
  29. 29.
    Pashigian, Peter. ‘The Effect of Market Size on Concentration,’ International Economic Review, 10 (October, 1969), pp. 291–314.Google Scholar
  30. 30.
    Pashigian, Peter. ‘Market Concentration in the United States and Great Britain,’ Journal of Law and Economics, 11 (October, 1968), pp. 299–320.Google Scholar
  31. 31.
    Phillips, Almarin. ‘Structure, Conduct, and Performance — and Performance, Conduct, and Structure,’ Industrial Organization and Economic Development: In Honor of E S.. Mason, ed. J. W. Markham and G. F. Papanek. Boston: Houghton-Mifflin, 1970, Chapter 2.Google Scholar
  32. 32.
    Phlips, Louis, et al. Effects of Industrial Concentration: A Cross-Section Analysis for the Common Market. Amsterdam: North-Holland, 1971.Google Scholar
  33. 33.
    Pryor, Frederic L. ‘An International Comparison of Concentration Ratios,’ Review of Economics and Statististics, 54 (May, 1972), pp. 130–140.Google Scholar
  34. 34.
    Pryor, Frederic L. Property and Industrial Organization in Communist and Capitalist Nations. Bloomington: Indiana University Press, 1973.Google Scholar
  35. 35.
    Rosenbluth, Gideon. Concentration in Canadian Manufacturing Industries. National Bureau of Economic Research, No. 61, General Scries. Princeton: Princeton University Press, 1957.Google Scholar
  36. 36.
    Shepherd, William G. ‘Trends of Concentration in American Manufacturing Industries, 1947–1958,’ Review of Economics and Statistics, 46 (May, 1964), pp. 200–212.Google Scholar
  37. 37.
    Scherer, F. M. Industrial Market Structure and Economic Performance. Chicago: Rand-McNally, 1970.Google Scholar
  38. 38.
    Simon, H. A., and C. P. Bonini. ‘The Size Distribution of Business Firms,’ American Economic Review, 48 (September, 1958 ), pp. 607–617.Google Scholar
  39. 39.
    Telser, Lester G. ‘Advertising and Competition,’ Journal of Political Economy, 72 (December, 1964), pp. 537–562.Google Scholar
  40. 40.
    Vatter, H. G. ‘The Closure of Entry in the American Automobile Industry,’ Oxford Economic Papers, 4 (October, 1952 ), pp. 213–234.Google Scholar
  41. 41.
    Weiss, Leonard W. ‘Factors in Changing Concentration,’ Review of Economics and Statistics, 45 (February, 1963), pp. 70–77.Google Scholar
  42. 42.
    Weiss, Leonard W. ‘Quantitative Studies of Industrial Organization,’ Frontiers f Quantitative Economics, ed. M. D. Intriligator. Amsterdam: North-Holland, 1971, Chap. 9.Google Scholar
  43. 43.
    Weston, J. Fred. The Role of Mergers in the Growth of Large Firms. Berkeley and Los Angeles: University of California Press, 1953.Google Scholar
  44. 44.
    Williamson, Oliver E. ‘Selling Expenses as a Barrier to Entry,’ Quarterly Journal of Economics, 77 (February, 1963), pp. 112–128.Google Scholar
  45. 45.
    Yoshino, Michael Y. The Japanese Marketing System. Cambridge: MIT Press, 1971.Google Scholar

Copyright information

© H. E. Stenfert Kroese B.V. 1976

Authors and Affiliations

  • Richard E. Caves

There are no affiliations available

Personalised recommendations