Structure-conduct-performance Research Articles

Impact of digital transformation on supply chain efficiency: a parallel mediation model

PurposeIt becomes a strategic option for enterprises to upgrade and improve supply chain efficiency (SCE) by promoting the digital transformation (DT). This study formulated a parallel mediation model to analyze the relationships among DT, supply chain transparency (SCT), supply chain agility (SCA) and SCE to reveal how DT affects SCE through the mediation of SCT and SCA.Design/methodology/approachThree paradigms, i.e. resource-based view (RBV), dynamic capability view (DCV) and structure-conduct-performance (SCP) were employed to address the parallel mediation effects. A total of 392 questionnaires (samples) from the port-hinterland supply chain in the DT pilot project of New Land-Sea Corridor in western China were collected, which was then applied to formulate a structural equation model (SEM) to verify the proposed hypotheses.FindingsThe results confirmed the existences of parallel mediating effects of SCT and SCA between DT and SCE. On one hand, the direct effect of DT on SCE is not significant when SCT and SCE plays jointly impacts on DT and SCE. On the other hand, SCT and SCA play a positive parallel full mediating effect of DT on SCE.Research limitations/implicationsThis study contributed to the literature on changing activities of SCE in DT processes. Specifically, it highlighted how DT leads to SCE via SCT and SCA activities. In addition, this study specified the conditions that the insignificant direct effect of DT has reflects on SCE, it is the time when SCT and SCE are jointly acting on DT and SCE.Originality/valueBy integrating insights from the RBV, DCV and SCP paradigms, this study clarified the mechanisms of DT on SCE, and provided insight on the role of SCT and SCA in the relationship between DT and SCE. The novelty of this study and the results extend the existing literature and provide implications for future research.

The impact of market concentration and market power on banking stability – evidence from Europe

PurposeAcademic research has intensively analyzed the relationship between market concentration or market power and banking stability but provides ambiguous results, which are summarized under the concentration-stability/fragility view. We provide empirical evidence that the mixed results are due to the difficulty of identifying reliable variables to measure concentration and market power.Design/methodology/approachUsing data from 3,943 banks operating in the European Union (EU)-15 between 2013 and 2020, we employ linear regression models on panel data. Banking market concentration is measured by the Herfindahl–Hirschman Index (HHI), and market power is estimated by the product-specific Lerner Indices for the loan and deposit market, respectively.FindingsOur analysis reveals a significantly stability-decreasing impact of market concentration (HHI) and a significantly stability-increasing effect of market power (Lerner Indices). In addition, we provide evidence for a weak (or even absent) empirical relationship between the (non)structural measures, challenging the validity of the structure-conduct-performance (SCP) paradigm. Our baseline findings remain robust, especially when controlling for a likely reverse causality.Originality/valueOur results suggest that the HHI may reflect other factors beyond market power that influence banking stability. Thus, banking supervisors and competition authorities should investigate market concentration and market power simultaneously while considering their joint impact on banking stability.

Testing of the Structure-Conduct-Performance Hypothesis for Industrial Banking Profitability: Evidence from Indonesia

This study aims to test the validity of the Structure Conduct and Performance (SCP) hypothesis on banking profitability in Indonesia. This research data comes from banking financial statements from the Financial Services Authority (OJK) and Bank Indonesia. The analysis method uses the panel data regression method. The banking industry studied includes 110 conventional commercial banks and Islamic banks from 2010-2019. This research has found that the profitability performance of the banking industry is statistically significantly influenced by concentration, market share, cost efficiency to generate revenue, bank size, net interest income margin, Bank Indonesia's benchmark interest rate, and economic growth. Meanwhile, inflation is insignificant. The contribution of the research was to develop of Structure Conduct Performance (SCP) theory. The SCP is applicable to Indonesian banking and it is the Hybrid of the Efficient-Structure Traditional Hypothesis which states that the effects of efficiency and market concentration have improved banking profitability performance. The combination of structure, market share, and efficiency supports the hypotheses on Efficiency and SCP Traditional. High banking profitability due to the combination of efficiency and market concentration formed by increased assets and mergers. Therefore, OJK and Bank Indonesia in encouraging asset improvement through future mergers can improve efficiency, the competitiveness of the banking industry, the and economic stability of Indonesia.

Structure-conduct-performance (SCP) paradigm in digital platform competition: a conceptual framework

PurposeThe study aims to analyze factors impacting firms’ success and persistence in a digital platform competition using the structure-conduct-performance (SCP) framework. The study also includes real-life cases that are beneficial to academicians and practitioners to understand and develop strategies for success and persistence during uncertainty.Design/methodology/approachA literature review to identify the factors that impact success and persistence in a digital platform competition was conducted following Webster and Watson (2002). Findings were integrated into a SCP framework to examine and understand the identified factors’ relational impact.FindingsWhile analyzing factors under the SCP framework, all factors were divided into three categories: those impacting positively, those impacting negatively and those with ambiguous impact on the success and persistence in digital platform competition. Digital platform firms can exploit the positively impacting factors to increase market share by being distinctive from other digital platform firms and becoming dominant by withstanding competition. On the other hand, negatively impacting factors increase barriers to entry, intensify competition and reduce the distinctiveness of digital platform firms. Lastly, a few factors may have either a positive or a negative impact depending upon the particular characteristics of the firm/industry.Research limitations/implicationsThe study opens the scope for future research on empirically testing the developed conceptual framework and relationships by developing propositions to posit the possible impact of these factors on digital platforms’ success and persistence.Originality/valueThe study contributed to the existing literature by using SCP framework to analyze the factors affecting firm’s success and persistence in a digital platform competition. Also, the study has discussed the relational impact of factors rather than their impact in isolation.

Formulation of SCP-Based Coconut Sugar Marketing Model Through Analysis of Marketing Patterns in Central Java Province, Indonesia

This study aims to analyze the marketing pattern of coconut sugar products, describe the stakeholders involved in the marketing of coconut sugar, and develop a structure, conduct, performance (SCP) based marketing model for coconut sugar. This research method is a quantitative descriptive method. The research location was determined purposively in the coconut sugar production center of Central Java Province (Banyumas, Purbalingga, and Cilacap Regencies). The research respondents were 60 people consisting of coconut sugar makers who were members of the Joint Business Group (KUB) and 60 people, 10 collectors traders, 2 wholesalers, and 4 institutional exporters. Data were analyzed descriptively. Data analysis for the basic structure by measuring market share size and concentration (CR4). The basis of conduct is through analysis of sales and purchasing processes, payment systems, and institutional cooperation. The basis of performance is obtained from the analysis of the margins of the trading system and the level of prices received by farmers. The results showed that there are two marketing channels for coconut sugar. A tight oligopsony is formed based on the CR4 (Concentration Ratio for the Big Four) value, while the Herfindahl index value shows that the market formed is an oligopoly. Market behavior occurs when the payment system is made in cash at the level of collectors and non-cash at the level of wholesalers. In market performance, the largest marketing margin is in the marketing channel pattern 1 of Rp. 8415.4/kg, the lowest in the channel 2 pattern of Rp. 6500/kg. The highest Farmer share value is in the marketing channel pattern 2 as 74%, and the lowest is in the channel 1 pattern at 66.3%.

Analysis of banking competition in Indonesia and its impact on profitability: Structure conduct performance (SCP) approach

In the past decade, the profits obtained by banks in Indonesia have generally tended to increase, except during the pandemic. However, the number of banking business actors in Indonesia has continued to decline, indicating that the banking structure is becoming more concentrated and potentially leading to an oligopoly. Therefore, the purpose of this study is to determine whether the increasingly concentrated banking market structure or weak competition has a significant impact on the growing profitability of banks in Indonesia. If this hypothesis is proven true, it would suggest that banking, as a financial intermediary, contributes to higher costs for economic development, particularly within financial markets. In this study, the Lerner index is employed to measure the level of concentration or competition among banks. Subsequently, the Treatment Effect Model is utilized to estimate the extent of the impact of competition levels on profitability within the banking sector. The findings of the study reveal two key points. Firstly, the reduction in the number of banking players has been accompanied by increased competition among banks in Indonesia, particularly evident after 2016. Secondly, a higher level of concentration or reduced competition corresponds to increased opportunities for banking profitability. Consequently, there are indications that the decrease in the number of banking business actors in Indonesia is correlated with heightened competition, suggesting improved efficiency in banking management. This phenomenon could elucidate the reason why profitability in the banking sector appears to be on the rise despite a decrease in the number of banking players.

Measuring the Competition Index in the Indonesian Manufacturing Industry: The Structure–Conduct–Performance Paradigm

This study proposed a fresh measure of the competition index in the Indonesian manufacturing industry during the period of 1990–2015. The competition index was estimated using indicators in the dimensions of the structure–conduct–performance paradigm. This research used principal component analysis to weigh the indicators in a dimension as well as to weigh the dimensions of the structure–conduct–performance in the final estimation of the competition index. This study found that the Indonesian manufacturing industry had a low competition. The dimension of structure had the highest contribution to the competition index compared to the dimensions of conduct and performance. The performance was also positively affected by the structure and conduct variables. This research contributed to the literature by providing a new competition index using the complete aggregated dimensions of structure, conduct, and performance. Policymakers could also use this competition index to indicate the level of competition in the industry as well as the sources of competition.

The impact of social media marketing on new venture performance

PurposeThe purpose of this paper is to examine the impact of social media marketing on new venture performance utilizing Structure-Conduct-Performance (SCP) theory.Design/methodology/approachA survey approach was employed, and questionnaires were sent out to the representatives of new ventures established in the previous six years at the time of data collection. Measures were adapted from SCP theory and the measurement model examined. A total of 248 responses were analyzed using structural equation modelling (LISREL 11).FindingsThe results indicate that social media marketing capabilities have a positive impact on the marketing performance of new ventures through a mediating effect of social media marketing performance. Thus, social media marketing performance affects new venture performance through marketing performance.Research limitations/implicationsThis research supports the vitality of social media in the lives of new firms and the importance of social media when executing marketing activities. The perceptive measurement of social media marketing capabilities on the firm level can be useful for new ventures to evaluate their competencies related to social media, and thus help firms improve those capabilities over time.Originality/valueThis research contributes to the existing knowledge on linkages between social media marketing capabilities and new venture performance acknowledging the role of a turbulent market environment. Therefore, the recognition of industry structure articulated by a turbulent market environment, social media marketing capabilities and social media support for competitive marketing strategy answers the question of how social media marketing capabilities drive competitive marketing strategy and subsequently influence performance.

Market structure, trader behaviour and performance of small ruminants marketing in Benin, West Africa

Livestock markets are characterised by imperfections, distortions, and efficiency problems that impact livestock marketing. The purpose of this research was to analyse the sheep and goat marketing system in Benin using the structure-conduct-performance (SCP) approach. Primary data were collected from 215 small ruminant traders selected from 21 markets to calculate the market concentration degree, marketing margin, and efficiency. The four largest traders’ concentration ratio (CR4) and Hirschman Herfindahl Index (HHI) show that small ruminant markets have an effective competition structure. These markets were unconcentrated, and barriers to entry were nonexistent, except for trading capital. Small ruminants sold in markets differed according to the animal’s body condition, ecotype, age, sex, and coat colour. These attributes and periods of sale are the main factors that influence pricing. Transport costs, animal feed and care costs, transport, and market taxes were the main transaction costs faced by the traders. The total transaction costs per sheep and goats were estimated at 742.7 ± 530.7 XOF and 663.2 ± 463.6 XOF respectively (XOF is a common and official currency of the eight member states of the West African Economic and Monetary Union. 1 USD = 612,38 XOF). Average marketing margin was 5,869.2 ± 4,357.7 XOF per sheep and 3,851.2 ± 1,597.8 XOF per goat. The marketing efficiency was 78.8% for sheep and 78.9% for goats. This depended significantly on the type of trader, whereby wholesalers were the least efficient. Efficiency, including transaction costs and marketing margins, did not vary significantly between sheep and goats. To improve the efficiency of small ruminant marketing, attention needs to be given to improving the road infrastructure that serves markets and formulating new marketing policies on taxes.

Macro investigation on China's engineering insurance industry: based on industrial organization theories

PurposeIn China, engineering insurance has been questioned as not being beneficial as expected. This paper seeks to further understand how China's engineering insurance industry functions and to provide a macro perspective explanation for engineering insurance's underdevelopment.Design/methodology/approachThree industrial organization hypotheses were extended to the engineering insurance context: structure conduct performance (SCP), relative market power (RMP) and efficiency structure (ES) hypotheses. This paper employed the Generalized Method of Moments (GMM) and Data Envelopment Analysis (DEA) bootstrap to test the hypotheses using panel data from 2008 to 2017.FindingsThe results suggest that the SCP paradigm is validated in China's engineering insurance market, indicating a concentrated market where the welfare of consumers (e.g. owners, contractors and designers) may be eroded. Several factors are identified to have significant impacts on engineering insurers' performance, such as the investment return, percentage of engineering business, the ratio of outstanding claims, the number of large contractors, market rivalry and entry barriers.Originality/valueDespite the sheer size of China's construction industry and the urgent need to improve risk management, the insurance industry that serves construction firms engineering insurance is underdeveloped. Engineering insurance is yet to be understood from a macro perspective, which may reveal the underlying reasons for engineering insurance's underdevelopment. The industrial organization theories provided a theoretical framework to test the functioning of this specific industry. The disaggregated data (engineering line specific) is employed to ensure effective regulation and policymaking.

Market chain analysis of chickpea in Northwest Ethiopia

AbstractThe purpose of the paper is to explain the organization, behaviours and output of smallholder farmers of chickpea market and to analyse the structure–conduct–performance (S‐C‐P) of chickpea in the study area. The study was supported by a recent empirical study and used primary and secondary data from 122 respondents, as well as published and unpublished documents, to better understand how market structure and seller behaviour affect market performance. The study was conducted using the S‐C‐P model analytical approach. Weak oligopoly dominates the chickpea market in the research area (concentrated in the hands of few traders). The goal of the study was to fill the knowledge gap that existed on the topic, contribute to a proper understanding of the difficulties and enhance market development strategies for the benefit of producers, traders and other market participants. According to the research of the market structure, the district market has an oligopolistic market structure with a concentration ratio of 43.35%. In addition, the market is restricted by entry‐level obstacles such as a lack of funding, licensing requirements, the issue of constant supply and a lack of prior expertise in chickpea trading activities. The oligopolistic market structure has also led to chickpea market behaviours that is distinguished by a market strategy where the traders have the upper hand in determining the chickpea price. The study focuses on raising farmers' educational levels, enhancing extension and finance services, building transportation facilities to provide producers more negotiating leverage and accessing improved production techniques as a way to choose the best marketing outlet. Government agencies and relevant parties must step in to address the issues by disseminating current market data on the chickpea industry, enhancing market connectivity and supplying the market with their goods at competitive prices.

Structure-Conduct-Performance (SCP) Paradigm: A VAR and VECM-based Granger Causality Analysis

Structure-Conduct-Performance (SCP) Paradigm: A VAR and VECM-based Granger Causality Analysis

Structure-Conduct-Performance (SCP) Paradigm: A VAR and VECM-based Granger Causality Analysis

Structure-Conduct-Performance (SCP) Paradigm: A VAR and VECM-based Granger Causality Analysis

Analisis Kinerja Industri Minyak Kelapa Sawit di Indonesia Menggunakan Paradigma Structure Conduct Performance

This study aims to analyze the performance of the palm oil industry in Indonesia, using the Structure Conduct Performance (SCP) paradigm. The data in this study uses secondary data namely the annual reports of 10 companies engaged in the palm oil industry in Indonesia from 2015 to 2020 which are published on the company’s website. The data is then processed using Microsoft Excel 2016 software to obtain data on Market Share, Concentration Ratio 4, Minimum Efficiency of Scale, Capital Labor Ratio, Internal Efficiency, and Price Cost Margin. The analysis method of this research uses panel data regression analysis. The results of this study indicate that Concentration Ratio 4 has a negative and significant effect on Price Cost Pargin, while Capital Labor Ratio and Internal Efficiency have a positive and significant impact on Price Cost Margin of thePalm Oil Industry in Indonesia in 2015 – 2020.

Local Hybrid Newspapers Typology: Three Cases From Radar Media Group Members In Indonesia

The survival of print media in the internet and social media era is increasingly threatened, especially with the increase in paper prices and the shift of advertisers to online media. One common strategy that print newspapers adopt is to establish an online version of the print newspaper and, accordingly, become a hybrid newspaper. This paper explores how three hybrid local newspapers in Indonesia reacted to the challenges of digitalization in three different market structures: monopolistic, duopoly, and oligopoly. We see this as a form of media behavior in dealing with market structures formulated in the structure-conduct-performance (SCP) paradigm. The analysis attempts to find a typology of local hybrid newspapers based on the three interrelated components of SCP. The data of this study were obtained from interviews with top management of the three newspapers, accompanied by primary and secondary literature studies. The study found different practices of the three newspapers responding to their respective markets in terms of organizational structure, content, and support channels, online and offline. It allows us to formulate three types of mixed media: social hybrid media, business hybrid media, and Omni hybrid media. Strategy carried out by the business hybrid media allows gain profits and improve employee welfare

Analysis Of Structure – Conduct - Performance (SCP) on The Merger of State-Owned Enterprise Islamic Banks Based on The Assets Value

Merger is the merging of two or more companies so that the company becomes better and creates new dynamics. Besides that, it creates efficiency and increases market share, expands the business that is run and has stronger competitiveness. This is the goal of the merger of 3 state-owned Islamic banks including BRI Syariah, BNI Syariah and Bank Mandiri Syariah to become Bank Syariah Indonesia (BSI). Bank mergers are deemed necessary in order to create a better bank which in the end can have a significant and positive impact on a banking system that is healthy, efficient, resilient and able to compete in the increasingly tight and competitive global economy and free market. This series of mergers clearly reduced the number of banks. This raises important issues, including whether the smaller number of banks has reduced or even increased the concentration of the banking industry. In addition, it is also interesting to analyze the impact of the merger on the level of banking competition. This study aims to assess the impact of Islamic banking merger policies on market conditions. After the merger, will the market become more competitive or will it become more concentrated? The research method used is literature study. The structure variable is seen from the total assets and market share, the conduct variable is seen through the merger policy. Meanwhile, in analyzing the Performance variable, it is measured through Profit. After analyzing the structure-conduct performance (SCP) by assessing the impact of the sharia banking merger policy, it will be seen that the market is becoming more concentrated or becoming more competitive.

Firm innovation and technical capabilities for enhanced export performance: the moderating role of competitive intensity

PurposeDrawing on the resource-based view (RBV) and structure–conduct–performance (SCP) paradigm perspectives, this study aims to investigate the influence of the innovation and technical capabilities of exporting organisations on their export performance moderate by competitive intensity.Design/methodology/approachPrimary data were collected from 162 Chinese manufacturer–exporter companies operating across China. The conceptual framework of this study, which incorporated the impact of RBV and SCP paradigm determinants on export performance through the interaction effect of competitive intensity, was tested using structural equation modelling (Smart-PLS).FindingsResults show that the technical and innovation capabilities can increase its export success in international markets. Furthermore, this research finds that competitive intensity moderates the positive relationship between technical capability and export performance but not the relationship between innovation capability and export performance.Originality/valueThis study presents a holistic assessment of the export performance of manufacturer–exporter enterprises by accounting for the overlooked effect of organisational capabilities through the moderating function of competitive intensity. This study has far-reaching consequences for export academics and practitioners, including the fundamental concept of an internationalizing small- and medium-sized enterprises, especially the manufacturers.

Is Market Power or Efficiency behind Economic Performance? The Case of the Czech Food Processing Industry

This article attempts to identify the main reason for the profitability of Czech food processing companies. For this purpose, an analysis of the profitability of the food industry was carried out in the framework of the Structure–Conduct–Performance (SCP) paradigm; specifically, the relative market power (RMP) hypothesis versus the efficiency hypothesis was tested. The analysis used data at the micro-economic level of six Nomenclature of Economic Activities (NACE) sub-sectors of the Czech food processing industry in the period 2016–2020. The final dataset consisted of 2639 observations of 623 companies. The data came from the database of Bisnode Albertina and the Czech Statistical Office. Stochastic frontier analysis (SFA) and a regression model were used in the study. Based on the research carried out, performance does not seem to be explained by a greater market power represented by a firm’s market share. Only one sub-sector was proven to have a higher marginal effect of market power on profitability than technical efficiency. Thus, it can be concluded that companies with relatively larger market shares do not have greater market power and thus do not achieve higher profitability.

The Impact of COVID-19 on Hospitals Financial Performance: Evidence from California Hospitals

Goal: On March 19, 2020, the Governor of California, Gavin Newsom announced a statewide “shelter-in-place”, issued an executive order for hospitals to pause performing elective procedures, and requested state hospitals to increase inpatient bed supply to provide sufficient space to treat Covid-19 patients. These orders were lifted one month later on April 22, 2020. However, these changes and the ongoing effect of Covid-19 may have both immediate and long-term impacts on hospitals’ revenue and expenses. The purpose of this paper is to explore the impact of the Covid-19 pandemic on California hospital financial performance based on the structure-conduct-performance (SCP) framework and resource-based view (RBV) of the firm. Methods: A linear mixed-effects model was used to capture the effect of Covid-19 on financial performance over time (from 2017 Quarter 1 to 2020 Quarter 4) of the repeated measurements for each hospital, with the interaction from resources and ownership. Principal Findings: Covid-19 had a negative impact on hospital operating margin (OM) (b=-.03, p<.05), but not for the total margin (TM). We found a negative moderating role of total capital expenditure (b=-.00, p<.10) on hospital TM, but not for OM. We observed a positive moderating effect of for-profit hospitals for both OM (b=.04, p<.01) and TM (b=.02, p<.10) when compared to not-for-profit hospitals. Practical Applications: Hospital managers need to understand the impact of Covid-19 on hospital financial performance and find out the ways in helping hospitals recover from the pandemic and prepare for future pandemics or emergencies.

Analysis of The Effect of Market Structure and Firm’s Conduct on The Financial Performance of Cigarette Companies in Indonesia 2010-2019 Period (Case Study on Cigarette Companies Listed on The Indonesia Stock Exchange)

The cigarette industry sector is the leading actor of the most significant excise contributor. The potential of this industry experiences several obstacles that cause issues due to the policies set by the Government to maintain public health. These government policies generally affect a firm’s profitability due to the changing in market structure and the firm’s behavior. In knowing its effect on profitability in more depth, the structure-conduct-performance (SCP) paradigm can be applied in this case. This paradigm emphasizes that changes in market structure and a firm’s conduct could later affect the firm’s financial performance. Based on this statement, this study aims to analyze the market structure and firm’s behavior on the financial performance of cigarette companies listed on the IDX (Indonesian Stock Exchange) during the 2010-2019 period. The independent variables used in this study are the Market Share (MS) and Concentration Ratio (CR4) variables as proxies for the market structure, and the Advertisement to Sales Ratio (ASR) and Capital to Labor Ratio (CLR) variables as proxies for the firm’s conduct. The dependent variable used is the firm’s financial performance proxied by the Return on Assets (ROA) variable. The analytical method used is the fixed effect model (FEM). FEM select as the analytical method based on the results of the Chow test. The research results in the regression analysis show that the industrial structure proxied by the Market Share (MS) variable has a positive and significant effect on the Return on Assets (ROA) variable. In contrast, the Concentration Ratio (CR4) variable has a negative and significant impact on the Return on Assets (ROA) variable. In contrast, the conduct of the firms, which is proxied by the Advertisement to Sales Ratio (ASR) and Capital to Labor Ratio (CLR) variables, has an insignificant effect on the Return on Assets (ROA) variable.