Is Structure-Conduct-Performance a case of structure performance?: Structural Equation Modelling of Indian industries

Authors: Srinivas, C.¹; Kumar, Sushil²

Source: International Journal of Business and Emerging Markets, Volume 2, Number 1, 1 December 2009 , pp. 3-22(20)

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Abstract:

Based on Bain's work, a theoretical model for the Structure-Conduct-Performance (SCP) paradigm is conceptualised. Two basic hypotheses are tested. The first hypothesis is that structure affects performance mediated through conduct of firms in an industry. The second hypothesis is exactly the same but with opposite causal direction. Six additional variants of these two basic models are also tested. The results indicate that direct and total effects of industry structure on firms' profitability are positive and significant while the indirect effects (mediated through the conduct variables) are insignificant. It is observed that in the presence of entry barriers, industry concentration has no significant effect on firms' profitability.

Keywords: MANAGEMENT JOURNALS; Business Administration; ECONOMICS AND FINANCE JOURNALS; Economics

Document Type: Research article

DOI: http://dx.doi.org/10.1504/IJBEM.2010.029741

Affiliations: 1: Indian Institute of Management, Lucknow 226013, UP, India. 2: Indian Institute of Management, Lucknow 226013, UP, India

Publication date: 2009-12-01

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The main objective of the inter-disciplinary peer-reviewed International Journal of Business and Emerging Markets is to encourage application of research methods to solve specific business-related problems in EM. The journal aims to promote articles that are based on the unification of the theoretical-quantitative or the empirical-qualitative approach, and that propose future research directions for scholars and recommend actionable business strategies for managers