Open AccessMarket Structure and Inter-industry Profit Differences in Taiwan
Author(s) -
Chengchung Lai
Publication year - 1994
Publication title -
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.