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Title: Firm performance and industry homogeneity in Malaysia
Author: Yong, Sook-Lu
Awarding Body: Lancaster University
Current Institution: Lancaster University
Date of Award: 2011
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There has been a longstanding tradition in industrial economics of modelling firm profitability, which can be traced back to the seminal contribution of Bain (1951) and the 'so-called' Structure, Conduct, Performance (SCP) model. Over the decades, research in this field has advanced in two directions: empirical models have become richer and econometric techniques more sophisticated. Less attention has been paid to the underlying problems that might arise in the model if the available industrial classifications provide only a poor proxy for a firm's true market. This thesis explicitly addresses this issue using a sample of Malaysian companies. The thesis begins by modelling firm performance within the framework of SCP paradigm, using both static and dynamic specifications. The findings are mixed; for the sample as a whole profitability is enhanced by concentration although using only manufacturing firms reverses the result. There was also some evidence that market share, leverage, labour productivity and industry growth were positively associated , with profit margins, whilst firm capital intensity and openness were inversely related to it. The work then investigates how sensitive the results are to the choice of industrial classification and it was revealed that certain of them were, as anticipated, sensitive to the classification scheme utilised. The thesis then proceeds to investigate homogeneity of firms, with the arm of establishing if the current classification systems are able to separate them into homogeneous groups. Going beyond the traditional cluster analysis, a heterogeneity in activity ratio is then proposed and this is employed alongside latent class cluster analysis to separate firms into homogeneous and heterogeneous groups. The profit function is then re-estimated using the alternative groups generated by these and the robustness of the findings with, respect to the homogeneity, or otherwise, of the sub- samples generated is interrogated
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available