Competing Paradigms of Competition

This study aims at the empirical investigation of the different conceptualizations of competition with the data available for Turkish manufacturing from 1980 to 2001. The analysis specifically takes into account the classical/Marxian view of competition, which rigorously recognizes the dynamic and turbulent nature of capitalist competition and is based on the concept of “regulating capital.†Time series analysis is conducted in order to test for the persistence of profit rate differentials among 3-digit classification of the manufacturing industries. The analysis, by differentiating between the intra- and inter-industry competition, addresses the classical/Marxian emphasis on the inter-industry trends of equalization. For this purpose, industry-based data instead of firm-based data are used. Lastly, the incremental rate of profit as the return to regulating capital is taken as the basis for establishing what is actually equalized in the course of competitive process. The analysis is conducted both for the average and incremental rates of return for a comparative view. The results show that while the average rate of profit shows significant persistence in most of the industries, the incremental rate does not. These results are in accordance with the classical/Marxian long-run center of gravity dynamics.JEL Classifications: B12, B51, D41, D49, L10, L60