Market Structure and Inter-industry Profit Differences in Taiwan | Zendy

Chengchung Lai | Zendy

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Market Structure and Inter-industry Profit Differences in Taiwan

Author(s) -

Chengchung Lai

Publication year - 1994

Publication title -

the pakistan development review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.154

H-Index - 26

ISSN - 0030-9729

DOI - 10.30541/v33i2pp.147-163

Subject(s) - openness to experience , profit (economics) , manufacturing sector , manufacturing , capital intensity , economics , profit margin , business , industrial organization , econometrics , labour economics , microeconomics , marketing , finance , psychology , social psychology

A high degree of openness and labour-intensive production arethe two main features of Taiwan's manufacturing sector. This study usesthe export/sales ratio and the KIL ratio to divide the sector into twogroups: (1) the export-oriented and domestic market-oriented industries,and (2) the capital-intensive and labour-intensive industries. The Chowtest confirmed the two-regime hypothesis for both the groups, supportingthe validity of our dualistic analysis. Using 1986 census data, thedistribution of profit rates in the two groups are compared. The majordeterminants of inter-industry profit differences are the domestic salesratio and the capital/output ratio; the other variables have eitherlittle impact or generate unsystematic effects.

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