IDEAS home Printed from https://ideas.repec.org/a/ags/ndjtrf/207141.html
   My bibliography  Save this article

Market Structure Conduct Performance Hypothesis Revisited Using Stochastic Frontier Efficiency Analysis

Author

Listed:
  • Shaik, Saleem
  • Allen, Albert J.
  • Edwards, Seanicaa
  • Harris, James

Abstract

Stochastic frontier analysis, which is used to estimate technical efficiency, is extended to examine the market structure, conduct and performance hypothesis for the U.S. trucking industry. The technical efficiency measure takes into account not only the relationship between inputs used in the production of output, but it also examines the importance of market structure conduct factors to the performance of the firm. An empirical application to U.S. trucking carriers over the period 1994-2003 is examined. Results reveal that average haul, average load, debt-to-equity and market concentration significantly affected technical efficiency. Capital, fixed and variable input variables were significant in the production function equation.

Suggested Citation

  • Shaik, Saleem & Allen, Albert J. & Edwards, Seanicaa & Harris, James, 2009. "Market Structure Conduct Performance Hypothesis Revisited Using Stochastic Frontier Efficiency Analysis," Journal of the Transportation Research Forum, Transportation Research Forum, vol. 48(3).
    • Handle: RePEc:ags:ndjtrf:207141
    DOI: 10.22004/ag.econ.207141
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/207141/files/2311-4621-1-PB.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.207141?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
    2. Bresnahan, Timothy F., 1982. "The oligopoly solution concept is identified," Economics Letters, Elsevier, vol. 10(1-2), pages 87-92.
    3. Byeongyong Paul Choi & Mary A. Weiss, 2005. "An Empirical Investigation of Market Structure, Efficiency, and Performance in Property‐Liability Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 72(4), pages 635-673, December.
    4. Demsetz, Harold, 1973. "Industry Structure, Market Rivalry, and Public Policy," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 1-9, April.
    5. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 2, number 2.
    6. Frech, H E, III & Mobley, Lee Rivers, 2000. "Efficiency, Growth, and Concentration: An Empirical Analysis of Hospital Markets," Economic Inquiry, Western Economic Association International, vol. 38(3), pages 369-384, July.
    7. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    8. Caves, Douglas W & Christensen, Laurits R & Swanson, Joseph A, 1981. "Productivity Growth, Scale Economies, and Capacity Utilization in U.S. Railroads, 1955-74," American Economic Review, American Economic Association, vol. 71(5), pages 994-1002, December.
    9. Pedro Cantos & José Pastor & Lorenzo Serrano, 1999. "Productivity, efficiency and technical change in the European railways: A non-parametric approach," Transportation, Springer, vol. 26(4), pages 337-357, November.
    10. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
    11. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amos Gitau Njuguna, 2014. "Competition in the Financial Services Sector: A Case of Kenyan Annuities Market," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 4(10), pages 75-91, October.
    2. Amos Gitau Njuguna, 2014. "Competition in the Financial Services Sector: A Case of Kenyan Annuities Market," International Journal of Business and Social Research, LAR Center Press, vol. 4(10), pages 75-91, October.
    3. Serkan Dilek & Hayrettin Kesgingoz, 2016. "SWOT Analysis of Safranbolu City in Terms of Tourism," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 5(1), pages 54-64, January.
    4. Chong, Hooi Ying & Chan, Tze-Haw, 2014. "Market Structure and Competition: Assessment of Malaysian Pharmaceutical Industry based on the Modified Structure-Conduct-Performance Paradigm," MPRA Paper 59537, University Library of Munich, Germany, revised 15 Sep 2014.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Edwards, Seanicaa & Allen, Albert J. & Shaik, Saleem, 2006. "Market Structure Conduct Performance (SCP) Hypothesis Revisited using Stochastic Frontier Efficiency Analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21350, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Amit Ghosh, 2018. "What Drives Banking Industry Competition in Developing Countries?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 43(4), pages 1-20, December.
    3. Richard Schmalensee, 2012. "“On a Level with Dentists?” Reflections on the Evolution of Industrial Organization," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 41(3), pages 157-179, November.
    4. Devin Garcia & Levent Kutlu & Robin C. Sickles, 2022. "Market Structures in Production Economics," Springer Books, in: Subhash C. Ray & Robert G. Chambers & Subal C. Kumbhakar (ed.), Handbook of Production Economics, chapter 13, pages 537-574, Springer.
    5. Delis, Manthos D. & Tsionas, Efthymios G., 2009. "The joint estimation of bank-level market power and efficiency," Journal of Banking & Finance, Elsevier, vol. 33(10), pages 1842-1850, October.
    6. Simbanegavi, Witness & Greenberg, Josh & Gwatidzo, Tendai, 2012. "Testing for competition in the South African banking sector," MPRA Paper 43627, University Library of Munich, Germany.
    7. Mercedes Gumbau Albert & Joaquín Maudos Villarroya, 2000. "- Profitability, Market Structure And Efficiency: An Application To The Spanish Industry," Working Papers. Serie EC 2000-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    8. Shaffer, Sherrill, 2004. "Patterns of competition in banking," Journal of Economics and Business, Elsevier, vol. 56(4), pages 287-313.
    9. Kutlu, Levent & Sickles, Robin C., 2012. "Estimation of market power in the presence of firm level inefficiencies," Journal of Econometrics, Elsevier, vol. 168(1), pages 141-155.
    10. Sheldon, Ian M., 2017. "The Competitiveness Of Agricultural Product And Input Markets: A Review And Synthesis Of Recent Research," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 49(1), pages 1-44, February.
    11. Ian Sheldon & Richard Sperling, 2003. "Estimating the Extent of Imperfect Competition in the Food Industry: What Have We Learned?," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 89-109, March.
    12. Fenn, Paul & Vencappa, Dev & Diacon, Stephen & Klumpes, Paul & O'Brien, Chris, 2008. "Market structure and the efficiency of European insurance companies: A stochastic frontier analysis," Journal of Banking & Finance, Elsevier, vol. 32(1), pages 86-100, January.
    13. Ion Lapteacru & Emmanuelle Nys, 2011. "L'impact de la concurrence bancaire sur l'efficience des banques : le cas des Pays d'Europe Centrale et Orientale," Post-Print hal-00785466, HAL.
    14. Allen, Albert J. & Fuentes, Porfirio A. & Shaik, Saleem, 2004. "Stochastic Frontier Efficiency Analysis of Agribusiness Trucking Companies," 2004 Annual meeting, August 1-4, Denver, CO 19946, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Lukáš Čechura & Tinoush Jamali Jaghdani, 2021. "Market Imperfections within the European Wheat Value Chain: The Case of France and the United Kingdom," Agriculture, MDPI, vol. 11(9), pages 1-21, August.
    16. Beviá, Carmen & Corchón, Luis C., 2013. "Endogenous strength in conflicts," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 297-306.
    17. Micha Gisser & Raymond Sauer, 2000. "The Aggregate Relation between Profits and Concentration is Consistent with Cournot Behavior," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 16(3), pages 229-246, May.
    18. Hovhannisyan, Vardges & Bozic, Marin, 2016. "The Relationship Between Price And Market Structure: Evidence From The Us Food Retail Industry," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236222, Agricultural and Applied Economics Association.
    19. Bickenbach, Frank, 1999. "Regulierung und Wettbewerb im Bereich der Netzinfrastrukturen: Begründung, Regeln und Institutionen," Kiel Working Papers 910, Kiel Institute for the World Economy (IfW Kiel).
    20. Reiss, Peter C. & Wolak, Frank A., 2003. "Structural Econometric Modeling: Rationales and Examples from Industrial Organization," Research Papers 1831, Stanford University, Graduate School of Business.

    More about this item

    Keywords

    Public Economics;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ndjtrf:207141. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: http://www.trforum.org/journal/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.