SCP Paradigm Research Articles

THE RISE, FALL, AND LEGACY OF THE STRUCTURE-CONDUCT-PERFORMANCE PARADIGM

The Structure-Conduct-Performance paradigm was the core framework of industrial organization for two decades, and had a significant impact on competition policy from the 1950s through the 1970s. This essay considers what made the SCP framework so influential in the United States, the shortcomings economists identified in the framework during the shift to the “new IO” in the late 1970s, and the lasting contributions that the SCP paradigm made on policy and the study of industry and competition.

System Construction of Intercity Culture and Xinjiang Music Integration in the Context of “One Belt, One Road” Based on SCP Model

Abstract Music content needs to draw nutrients from excellent regional culture, and excellent regional culture needs to be carried forward through music, so the integration of intercity culture and Xinjiang music is in line with the development and inheritance of music culture. This paper briefly introduces the analysis model of the SCP paradigm and the music recommendation algorithm improved by K-Means and Canopy clustering algorithms and analyzes the integration of intercity culture and Xinjiang music in the context of “One Belt One Road” based on the SCP model and the improved algorithm. The analysis shows that music lessons incorporating intercultural culture account for about 25% of the lesson time in Xinjiang’s primary and secondary school music curriculum, and in 2013, the content of Xinjiang’s local music culture at the junior high school level accounts for more than 35% of the total lesson time in the music curriculum. Intercultural culture and Xinjiang music are gradually merging, and music education will play a large role in further educational reform in terms of cultural transmission and integration.

A study of China's Nonwovens Industry Based on the SCP Paradigm

As a raw material in the textile industry, nonwovens mainly include masks, protective clothing, surgical gowns, etc. in the final products of medical and hygiene products. The arrival of the new crown epidemic has made the demand for such products soar. Therefore, the nonwovens industry is also gaining huge attention in the short term. Based on the research context of the Structure-Conduct-Performance paradigm, the nonwovens industry in China was studied. Firstly, the development status of Chinese nonwovens industry was analyzed, and then the market concentration, product differentiation and entry and exit barriers of Chinese nonwovens industry were analyzed, and it is concluded that Chinese nonwovens industry is a competitive market structure. Then on this basis, the market behavior and market performance of enterprises in the competitive market structure were discussed. Finally, based on the above research, put forward targeted suggestions for the long-term development of Chinese nonwovens industry.

Growth Drivers, Fragmentation, and Fairness in Donation Markets: From the Perspective of the SCP Paradigm and Market Quality Theory

Growth Drivers, Fragmentation, and Fairness in Donation Markets: From the Perspective of the SCP Paradigm and Market Quality Theory

Environmental Issues in City Logistics: The Case of Low Emission Zones in Europe

The energy transition can be defined as all the transformations of the system of production, distribution and consumption of energy carried out in a territory in order to make it more ecological. The aim is to reduce the environmental impact of an energy system. Inseparable from sustainable development, the energy transition contributes to the fight against global warming, through the implementation of changes based on innovative technologies, but also and above all on new political orientations. The paper focuses in particular on city logistics in Europe as an illustration of energy transition, showing that strategic interactions between city logistics stakeholders are at the heart of new practices, particularly in the implementation of low emission zones (LEZs). A case study was conducted with a large French metropolitan area, which is at the forefront of sustainable city logistics. This case study is based on an analysis of official documents written as part of the implementation of the LEZ. Using a conceptual framework drawn from the SCP paradigm, which is at the origin of the industrial organization’s stream, the results indicate that the success of environmental city logistics strategies depends effectively on interactions between several public and private stakeholders, and not only on virtuous managerial practices from companies.

Market Analysis of Chinese Outdoor Sportswear Industry Based on the Paradigm of "Structure-Behavior-Performance"

Based on the research context of SCP paradigm, this paper first clearly defines the category of outdoor sportswear industry according to the "Statistical Classification of National Sports Industry" and analyzes the current situation of China's outdoor sportswear industry market. Secondly, SCP paradigm is adopted to analyze the market structure, behavior and performance of China's outdoor sportswear industry in detail, and it is found that China's outdoor sportswear industry is a competitive type of market structure. Then it discusses the pricing, discount, promotion and other price behaviors of enterprises in the market. The influence of non-price behaviors mainly in advertising, sponsorship and organizational adjustment mainly in MERGER and acquisition on market concentration and product differentiation. In the end, the market performance of outdoor sportswear industry, such as overall profit decline, productivity and technical level improvement and industrial structure optimization and upgrading, is expounded.

Analysis on the Organizational Structure of Shandong Apple Industry Based on SCP Paradigm

Based on the development status of the apple industry in Shandong Province, using the SCP paradigm to analyze the market structure, market behavior and market performance of the apple industry in Shandong Province, it is found that the organizational structure of the apple industry in Shandong Province mainly has the following problems: The apple industry in Shandong Province is relatively low in concentration and the phenomenon of small-scale in production and operation is widespread. Most of the apples are late-maturing and fresh products, and the degree of product differentiation is low; sales channels are narrow; cooperatives have a low level of organization and lack of leading enterprises. Therefore, the planting area and variety structure should be adjusted to optimize the market structure; the promotion channels and the scope of cooperation should be broadened, and innovation capabilities should be improved to improve market behavior, thereby improving market performance.

Does Banking in Indonesia tend to be Concentrated?

The banking in Indonesia has undergone several changes in the market structure that ultimately impacts the prevailing policies and regulations. This study aims to examine the impact of changes in the banking market structure identified through the level of market concentration in the banking environment and examine the factors that influence the level of concentration of the banking market from 2005 to 2016. The study also examined the impact of changes in banking structure during the global crisis. The measurement of banking concentration used in this study is the Herfindahl-Hirschman Index (HHI). Furthermore, the influential factors consist of: (1) Bank specification, including bank size (Size), credit risk (NPL), profitability (ROE), banksoundness(CAR),(2)Market specification,namely the number of standingbank (NUM), and (3) Global crisis. The study used GLS (Generalized Least Square) method to detect autocorrelation on each variable.The results show that banks in Indonesia tended to have a low level of market concentration. The results are also in accordance with the SCP paradigm which states that banks tend to generate high profits when the level of banking market concentration is high.Keywords : Market Concentration, Competition, Dual-Banking, Bank Specification, Market Specification, Global Crisis.

Supply-Side Reform of Beijing-Tianjin-Hebei Freight Transport Based on the Perspective of Structural Dimension

Supply-side reform has become the compass of China's reform and development. The transportation structure in the Beijing-Tianjin-Hebei region has the structure attribute of road transportation in the aspect of freight transport, so the supply-side reform of freight transport is one of the focuses and directions of the supply-side reform of transportation. Taking Beijing-Tianjin-Hebei region as the regional representative, this paper first analyzes the current situation of cargo transportation structure in the Beijing-Tianjin-Hebei region, which shows that road transportation plays a dominant role in freight transport. Then, based on the perspective of structural dimension, combining the theory of industry economics SCP paradigm, this paper discusses the key point of supply-side reform of Beijing-Tianjin-Hebei freight and conclude that medium and long-distance freight transport should be transferred by road to railway and water transport in the Beijing-Tianjin-Hebei region. And it is necessary to establish a comprehensive multi-modal transport system, which mainly based on railway transport, to optimize the transportation structure and improve the performance of the transportation.

Analysis on China Men's Clothing Industry Based on SCP Paradigm

This paper analyzes the market structure from the perspectives of market concentration and trade barrier, and calculates that the market type of China's men's clothing industry is competitive market. On this basis, this paper discusses the market behaviors of men's clothing enterprises, including their pricing behaviors, non-price behaviors and m&a behaviors, and then verifies the influence of market structure on enterprise behaviors. Then, this paper explores the influence of enterprise market behavior on market performance. By analyzing the resource allocation and production efficiency of men's clothing enterprises, the results show that the enterprise's market performance is restricted by the enterprise's market behavior. Finally, this paper verifies that the market structure, market behavior and market performance of men's clothing enterprises conform to the one-way causal relationship proposed by Harvard school.

Assessing the Effects of Government Incentives on the Performance of SMEs in Food Manufacturing Sector

NOTE: THIS ARTICLE WAS PUBLISHED WITH THE INFORMING SCIENCE INSTITUTE. Aim/Purpose................................................................................................................................................................................................. The Malaysian government has given numerous incentives to small and medium enterprises (SMEs), including those in the food manufacturing sector, in an attempt to boost their performance. This study aims to assess the effects of these incentives, particularly financial and tax incentives, on the performance of SMEs in the Malaysian food manufacturing sector. Background................................................................................................................................................................................................. Millions of Ringgit has been allocated for the development of SMEs by the Malaysian government. The findings of this study aim to assist the policymakers in improving the current policies in incentive give outs to enhance the effectiveness and reduce the number of SMEs that were forced to close down in less than five years of operation. Methodology................................................................................................................................................................................................. The study was conducted using structure, conduct, and performance (SCP) paradigm on secondary data from 140 companies over a period of five years (2013 – 2017). Correlation analysis was done to explore the relationship between each explanatory market variables included in the SCP paradigm. Contribution................................................................................................................................................................................................. This study provides insights into the effect of different types of government incentives on the performance of SMEs in the Malaysian food manufacturing sector. Findings....................................................................................................................................................................................................... The study found that financial and tax incentives gave different effects on the performance of SMEs in the Malaysian food manufacturing sector during the study period. Financial incentive shows a weak positive significant correlation with advertising-to-sales ratio (ASR), return on assets (ROA) and market share (MS) ratio while showing negative significant correlation towards capital intensity (CAP). On the other hand, tax incentive shows a strong significant positive correlation with MS and weak significant positive correlation with CAP, ROA and return on sales (ROS). This shows that financial incentive strongly correlates with SMEs’ performance, whereas tax incentive is associated with market structure and conduct of SMEs in the Malaysian food manufacturing sector. Recommendations for Practitioners............................................................................................................................................................ Firstly, the government should consider providing extra assistance to SMEs in entering the sector as entry barriers for the sector is relatively high. Focus can be given in increasing financial incentives at a more competitive rate as it can reduce debt or increase the firm’s equity or aid firms in acquiring assets, which are crucial for efficient and effective production of processed food. Allocation of tax incentives should be reviewed as it does not have a strong correlation with firms’ performance. Recommendation for Researchers............................................................................................................................................................... There are limitations to the number of SMEs included in this study. Hence, researchers are recommended to have direct contact with more firms to ensure more accurate data. Impact on Society........................................................................................................................................................................................... With more efficient and effective policies in the government’s financial and tax incentives, more allocation can be channeled to other areas that have direct implications to the citizen. Additionally, with better policies, more jobs will be created in the market, and a highly competitive market will lead to a production of higher quality products that can be enjoyed by the consumers. Future Research............................................................................................................................................................................................... This study has contributed to the SCP paradigm as it demonstrated the effects of government financial and tax incentives on the market structure, conduct, and performance of SMEs in the Malaysian food manufacturing sector. Future researches might focus on non-financial incentives given out by the government such as human resource development, training, industrial infrastructure and amenities, technology development and capabilities, technology transfer, and organizational innovation.

Governing Board Attributes as Profitability Influencers under Endogeneity: An Econometric Analysis in South Africa

Presently, the oversight role performed by the governing board has been interrogated due to the demise of several corporate giants. The governing board is responsible for advancing the strategic direction of the company by ensuring superior performance whilst managing risks. Accordingly, this study investigated whether the governing board has any influence on a firm’s profitability by using OLS and GMM estimation on an unbalanced panel of 130 firms over a six-year period. ROA served as a proxy for firm performance and several board-level governance variables were selected namely board size, board independence, CEO duality, director qualifications, and board interlocks. From an econometric contribution, this study found that the addition of instrument variables in the GMM estimation model has proven to be robust in examining corporate governance variables. GMM is also robust in controlling endogeneity and a possible bi-directional causality between board and profitability. From a theoretical contribution, agency, resource dependence and management hegemony theories are highly prevalent in the governing boards of the JSE. The results of this study are as envisaged in the SCP paradigm. All hypotheses were supported, showing overall that profitability is significantly influenced by the board attributes. This study provides a useful analysis of the theoretical framework used by academic writers as a foundation for model specification as well as contributes to the econometric methodology of corporate governance. These findings will also advise future researchers, stakeholders and regulators in better understanding the role of board composition from a profit maximisation and sustainability outlook.

Performance Analysis of China’s Fast Fashion Clothing Market Based on SCP Model

China’s fast fashion clothing market is dominated by Uniqlo, ZARA and H & M, supplemented by other fast fashion clothing brands. This paper uses SCP paradigm to analyze the fast fashion brands in China’s clothing market. By dividing the market structure of China’s fast fashion clothing, it is concluded that the market structure of China’s fast fashion clothing is oligopoly III, and the cost oriented price behavior of enterprises in the oligopoly market struc-ture is analyzed. In order to analyze the market performance of China’s fast fashion clothing market, digital non-price behavior and organizational ad-justment behavior of increasing the number of stores are used to analyze the market performance of China’s fast fashion clothing market.

The Market Structure of the Ghanaian Insurance Market

The insurance industry offers the Ghanaian economy a prospect to assemble enormous native savings for long-term, indigenous currency investment and provides an opportunity to generate employment. Insurance enhances the confidence of households, including the amassing of long-term savings against the loss of wage earners and sinking their reliance on community welfare provisions. This paper uses both SCP Paradigm and a quantitative research method; and aims to elucidate the existing procedures of measuring market structures and demonstrate the use of these measures for the selected industry. Using market share, concentration ratios, and Herfindahl-Hirschman index it was revealed in this research that a few large firms continue to dictate the market. Nonetheless, there are no monopolistic inclinations in the Ghanaian insurance market and firms are at liberty to compete with each other for market shares. This paper concludes that, the Ghanaian Insurance industry has undergone a structural change from 2014 to 2016.

The Profitability of Indian Tourism Sector: A Fixed Model Panel Analysis

The current paper tests the applicability of the SCP framework i.e. industrial structure, conduct and performance in the Indian tourism industry. Herfindahl-Hirshman Index was used to understand concentration index for the Indian tourism industry and the structure conduct and performance relationship was tested using fixed effect model for panel regression in Eviews. The data was collected from Prowess for 23 companies in the tourism industry for a period of five years i.e. 2011 to 2015. The results of the study indicated that the Indian tourism industry was highly concentrated between 2011-2015, with a few major players enjoying majority market share, however, in 2015, the indicators pointed towards lower levels of concentration. The panel regression analysis indicated that the SCP paradigm was not supported for Indian tourism industry, though support was found for relationship between conduct and performance. The negative relationship between conduct and performance also indicated that there was a higher expenditure on marketing and advertising in the industry. The results of the study indicated that the industry was not working on IO based structure but rather Efficiency bases model which needed to be studied further.

PROSEDUR UJI KEPATUHAN TERHADAP PRINSIP BERSAING ISLAMI PADA INDUSTRI PERBANKAN SYARIAH: SEBUAH PROPOSAL BERDASARKAN TEORI DAN KAJIAN EMPIRIS ORGANISASI INDUSTRI

An industry in Islamic Economics is required to compete perfectly regardless of its market structure. How to ensure this rule being implemented in reality, however, has been neglected either in literatures or by industry supervisors. This paper is aimed at proposing a systematic procedure to test the industry compliance toward islamic competition rules. The advance of theory and empirics of New Empirical Industrial Organization is used to formulate the procedure. There are two conditions to satisfy for an industry to have an islamic competition. The first and necessary condition is rejecting the Traditional Hypothesis which is based on collutive bahaviour of dominant banks. The second and sufficient condition is, the perfect competition is driven more by the intention of syariah compliance rather than due to the pressure of contestability. Keywords: SCP Paradigm, Perfect Competition, Contestable Market, Traditional Hypothesis, New Empirical Industrial Organization, Islamic Competition, Structural Approach, Nonstructural Approach, Panzar and Rosse Model

PROSEDUR UJI KEPATUHAN TERHADAP PRINSIP BERSAING ISLAMI PADA INDUSTRI PERBANKAN SYARIAH: SEBUAH PROPOSAL BERDASARKAN TEORI DAN KAJIAN EMPIRIS ORGANISASI INDUSTRI

An industry in Islamic Economics is required to compete perfectly regardless of its market structure. How to ensure this rule being implemented in reality, however, has been neglected either in literatures or by industry supervisors. This paper is aimed at proposing a systematic procedure to test the industry compliance toward islamic competition rules. The advance of theory and empirics of New Empirical Industrial Organization is used to formulate the procedure. There are two conditions to satisfy for an industry to have an islamic competition. The first and necessary condition is rejecting the Traditional Hypothesis which is based on collutive bahaviour of dominant banks. The second and sufficient condition is, the perfect competition is driven more by the intention of syariah compliance rather than due to the pressure of contestability. Keywords: SCP Paradigm, Perfect Competition, Contestable Market, Traditional Hypothesis, New Empirical Industrial Organization, Islamic Competition, Structural Approach, Nonstructural Approach, Panzar and Rosse Model

Connotation among Structure, Conduct, and Performance: A Panel Data Analysis of Selected Financial Firms in Pakistan

The study of Structure, Conduct, and Performance (SCP) paradigm is important to evaluate the performance of firms. The study scrutinizes the relationship among SCP paradigm of selected financial firms (Banks, Insurance, Modaraba and Exchange companies) in Pakistan. Panel data of 103 financial firms of Pakistan from 2007 to 2015 is employed for this purpose. Various models of panel data have been employed to find the more parsimonious one. It is concluded that there is positive association among SCP using panel data models and dynamic panel data model. It is recommended that all firms are needed to enhance their management regarding expenditures and they also need to increase the number of shareholders to boost the firm’s performance

The impact of environmental regulation on the coordinated development of environment and economy in China

The contradiction between environmental protection and economic development has become an important issue in China. Environmental regulation, as a vital content of public regulation, is an effective approach to rectify market failure. Thus, studying the impact of environmental regulation on the coordinated development between environment and economy is beneficial to design the most suitable environmental management system for Chinese government. Based on the theory of regulation economics and industrial organization, this paper incorporates environmental regulation policy in the traditional SCP paradigm and analyzes the conduction mechanism of market structure and market behaviors on the coordinated development between environment and economy. With the empirical analysis, we find the existence of an EKC curve, which means that tightening the environmental regulation is an effective means of guaranteeing economic growth and optimizing environmental quality. Eventually, we point out the problems existing in China’s current environmental regulation system and design a new one which is more suitable for the current economic development stage of China.

Structure, conduct and performance paradigm in assessing travel agency performances

Abstract The purpose of this paper is to present and exemplify traditional and neoclassical approaches to market structure and tourism firm performance analysis. The paper tackles some of the industrial economic thinking trends which were meant to fill the gaps left by the traditional approaches. Two approaches stand out from among the industrial economic trends: SCP paradigm and game theory. The results show that the strategy tourism operators prefer is to practise high prices; however there is no certainty that the competitors would adhere to such an idea at the beginning or during the season.