Edited By Engin ÇAKIR and Yusuf KADERLİ
Social sciences are made up of science disciplines that research humanity, society, and the world with a human dimension, and therefore its domain of influence is also serious and wide. Naturally, the social scientist has the power to influence society with his/her research and writing. This book aims to add the contributions of academicians from different disciplines to the social sciences fields they specialize in the academic literature and to give an idea about new researches. The book contains scientific articles on business, economics, public finance, tourism, and international relations.
Profitability of Turkish Manufacturing Firms: Efficiency or Market Power?: A. Elif Ay Yalcinkaya and Ramazan Ekinci
A. Elif Ay Yalcinkaya and Ramazan Ekinci
Abstract The relationship between efficiency, profitability and market power in the literature has developed on the basis of the efficient-structure (ES) hypothesis by Demsetz (1973) and the structure-conduct-performance (SCP or market power) hypothesis by Bain (1951) and Baumol (1982). This paper tests the different hypotheses explaining profitability in the generic framework of hypotheses of collusion versus efficiency, presenting as its main contribution the use of a direct measurement of efficiency. The analysis is performed on 115 firms operating in the Turkish manufacturing industry during the 2010–2019 period. The data is extracted from the Public Disclosure Platform (KAP) and firms balance sheet items. In order to test the hypotheses, the profit efficiency measures within the method of Bayesian Stochastic Frontier Analysis were used. In the empirical section, we perform a static and dynamic panel data approach to estimate the regression equations. The static and dynamic results show that there is a negative and significant relation between concentration and profitability for all industry, while a positive and significant relation between large firms’ concentration ratio and profitability. We also find a positive and significant effect of profit efficiency on firm profitability. This supports the ES hypothesis in the Turkish manufacturing industry.
Keywords: Efficient-Structure Hypothesis, Structure-Conduct-Performance Hypothesis, Turkish Manufacturing Industry, Bayesian Stochastic Frontier Analysis, Profitability
One of the basic assumptions of industrial organization theory is that firms act for profit maximization. To achieve this goal, firms can maximize their profits by maximizing their revenues or minimizing their costs. In...
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