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The
Structure-Conduct-Performance Paradigm and its Relevance
to the Indian Industry
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Praveen Kulshreshtha and Tapan Kumar Nayak
The
Structure-Conduct-Performance (SCP) paradigm is considered
to be an important tool of contemporary industrial economics.
It states that market performance depends on various elements
of market structure, such as entry conditions, market concentration,
and number and size of firms, as well as different forms
of firm conduct and strategic behavior, such as capacity
utilization, advertising and collusion. This study elucidates
the basic ideas of SCP theory and reviews important studies
pertaining to both developed and developing economies that
are based on the SCP paradigm, while exploring the relevance
of the SCP paradigm to the Indian industry. The relationship
between market concentration and market performance in the
Indian industry is discussed in depth, as is the association
between entry barriers in the Indian industry and market
performance. The link between market performance and competitiveness
of Indian firms is also explored. The study underscores
the increasing significance of the SCP paradigm in the post-reform
Indian industry.
©
2005 IUP. All Rights Reserved.
Market
Reform and Deindustrialization in Nigeria: 1986-2003
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Isola, Wakeel Atanda
This
paper examines the extent to which market reform has contributed
to deindustrialization in Nigeria during the period under
review. The result of our investigation confirms that the
reform has a negative impact on the industrial sector in
Nigeria. As a panacea to redress this deplorable condition,
the paper suggests that the government should address the
issue of infrastructure decay, particularly the electricity
supply that has been the bane of industrial sector in Nigeria.
©
2005 IUP. All Rights Reserved.
Performance
Differentials Between Indian and FDI Companies in India:
Some Explanations
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J Dennis Rajakumar
In
the system of national income accounting, Indian companies
and foreign (FDI) companies are included under private corporate
sector. The aggregate estimates of corporate investment
and savings, provides insight into the relative role of
the corporate sector in the economy. Since each constituent
of the corporate sector has its own method of governance
and is driven by different objectives, this paper studies:
a) relative performance; and b) drivers of performance between
Indian and foreign companies using RBI's study of company
finances. As the RBI's study does not give a separate series
on Indian companies, the paper begins with a discussion
on the methods followed to derive a series for Indian companies.
The study finds that FDI companies outplayed Indian companies
in performance and also that the differences between the
two widened over the years. Using literature on the relationship
between conduct and performance, and expected outcome of
policy changesthe observed performance differentials were
explained in terms of R&D intensity, advertising intensity,
vertical integration, salaries and wages intensity, export
intensity, and import intensity. All of them, except import
intensity were found to influence profit margin of Indian
companies. However, salaries and wages and export intensity
had negative influence. In contrast to this, only advertisement
and salaries, and wages intensity were found to negatively
influence profit margin of FDI companies, and vertical integration
had positive influence.
©
2005 IUP. All Rights Reserved.
The
Dynamics of Economic Growth, Inflation and Growth of Labor
Productivity: The
Case of Indian Manufacturing Sector
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Badri Narayan Rath and S Madheswaran
This
paper primarily focuses on the role of economic growth and
inflation in determining the growth of labor productivity
in the manufacturing sector. The empirical evidence derived
from a three variable Vector Autoregression model reveal
that both economic growth and inflation play a significant
role in influencing labor productivity as perceived by the
standard theories. The results from impulse response show
that inflation has a negative impact, while economic growth
has positive impact on the growth of labor productivity.
These evidences suggest that a better inflation and growth
oriented economic policies tend to improve productivity
of labor, which would strengthen the competitiveness of
manufacturing sector.
©
2005 IUP. All Rights Reserved.
Balancing
Energy and Environmental Needs:A Case of Indian Coal Industry
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Prajna Paramita Mishra
Coal
is considered to be an important raw material for many sectors
in India. Over the years, demand and supply, and import
of coal has increased concurrently. However, in the railways
and the domestic sector, there is a decrease in the growth
of demand for coal. These are the sectors where alternative
fuel is now being used, though in a limited way. But with
environmental issues gathering momentum, a question arises:
Can coal survive in a green world? This paper tries to address
this question from the Indian perspective.
©
2005 IUP. All Rights Reserved.
SCP
vs. Efficiency Approach-An Empirical Analysis of Indian
Pharmaceutical Industry
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Atanu Adhikari
Structure-Conduct-Performance
approach in the pharmaceutical industry is not relevant
due to negligible concentration and low barrier to entry.
This paper addresses the efficiency approach to find out
what are the factors that influence efficiency of firms
in the pharmaceutical industry. Data of all the companies
available in prowess database is taken for empirical analysis.
Two multivariate techniques namelyfactor analysis and multiple
regressionswere applied for such analysis. The unique finding
of the analysis was that there is no significant impact
of research and development and advertising expenses in
the efficiency of the firm. As the research and development
expenses in the pharmaceutical industry claims a considerable
share of annual revenue of the firm, it is time for the
firms to have a re-look on the return on investment in research
or make it more selective than general.
©
2005 IUP. All Rights Reserved.
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