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Market Structure and Inter-industry Profit Differences in Taiwan

Author

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  • Cheng-Chung Lai

    (National Tsing Hua University, Taiwan.)

Abstract

A high degree of openness and labour-intensive production are the two main features of Taiwan's manufacturing sector. This study uses the export/sales ratio and the K/L ratio to divide the sector into two groups: (1) the export-oriented and domestic market-oriented industries, and (2) the capital-intensive and labour-intensive industries. The Chow test confirmed the two-regime hypothesis for both the groups, supporting the validity of our dualistic analysis. Using 1986 census data, the distribution of profit rates in the two groups are compared. The major determinants of inter-industry profit differences are the domestic sales ratio and the capital/output ratio; the other variables have either little impact or generate unsystematic effects.

Suggested Citation

  • Cheng-Chung Lai, 1994. "Market Structure and Inter-industry Profit Differences in Taiwan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 33(2), pages 147-163.
    • Handle: RePEc:pid:journl:v:33:y:1994:i:2:p:147-163
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    File URL: http://www.pide.org.pk/pdf/PDR/1994/Volume2/147-163.pdf
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    References listed on IDEAS

    as
    1. Lai, Cheng-chung, 1989. "Market structure and inter-industry wage differences : The case of Taiwan," Economics Letters, Elsevier, vol. 31(2), pages 199-204, December.
    2. Schmalensee, Richard, 1989. "Inter-industry studies of structure and performance," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 16, pages 951-1009, Elsevier.
    3. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 2, number 2.
    4. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
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    Cited by:

    1. E. Dijkgraaf & R. Gradus, 2003. "Cost Savings of Contracting Out Refuse Collection," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 30(2), pages 149-161, June.

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