Competition in a Dual Economy

Competition in a Dual Economy

Copyright Date: 1986
Pages: 220
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  • Book Info
    Competition in a Dual Economy
    Book Description:

    Joseph Bowring places the dual economy in a historical context and analyzes the evolution of core and periphery competition. He also refines the dual economy hypothesis and provides strong new empirical support for it.

    Originally published in 1986.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

    eISBN: 978-1-4008-5445-5
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. I-IV)
  2. Table of Contents
    (pp. V-VI)
  3. List of Tables
    (pp. VII-VIII)
  4. Acknowledgment
    (pp. IX-2)
  5. CHAPTER ONE Firms, Industries, and Competition
    (pp. 3-10)

    The theory presented in this study is in the broad tradition of economic analysis, which has attempted to come to terms with the role and significance of the very large corporation in our economy. This tradition includes the neoclassical models of oligopoly and monopoly; models of imperfect competition and oligopoly behavior; models of workable competition, limit pricing, and contestable markets; Marxist models of monopoly; managerial models of the large corporation; Galbraith’s related theory of the “planning sector”; and dual economy analyses.¹ What ties this tradition together from the perspective of the present study is a common concern with how, if...

  6. CHAPTER TWO Core and Periphery Competition
    (pp. 11-47)

    The theory of core and periphery in the U.S. economy is a theory of competition. In order to survive, core firms have altered the form and nature of their competitive behavior several times since the late nineteenth century. Core firms are not pitiful, helpless giants fated to topple and rot into Marshallian senescence; their competitive adaptations have made them virtually indestructible. Their continued aggregate dominance of the economy is almost certain. From this perspective the industrial structure has been both cause and result of such strategic changes on the part of dynamic core firms; the interaction between the industrial structure...

  7. CHAPTER THREE The Development of Core and Periphery
    (pp. 48-78)

    This chapter outlines some key elements in the development of the core and periphery based on a set of details about the evolution of the industrial structure in the United States on which there is general agreement in the literature of economic history and industrial organization. The development analyzed is in two parts: the merger movement and subsequent consolidation of core firms, which extended from the late nineteenth century to the early 1920s; and the period beginning in the late 1920s and extending through the present, characterized by increasing core firm diversification.

    The rationalization of the transportation system in the...

  8. CHAPTER FOUR Theories of Industry Structure and Competition
    (pp. 79-103)

    The industrial organization literature implicitly and explicitly employs a theory of competition which is quite different from that advanced in chapter two. The much smaller body of work, here dubbed the dual economy literature, employs a variety of implicit and explicit approaches to competition which are, in turn, different in varying degrees from those presented in chapter two. This chapter reviews some of the salient aspects of the theories of competition in each literature and contrasts them with the core-periphery theory.

    The industrial organization tradition (hereafter the 10 tradition) embodies a concept of competition that gives primary importance to individual...

  9. CHAPTER FIVE Empirical Propositions on Industry Structure and Performance
    (pp. 104-150)

    This chapter will review selected portions of the industrial organization literature in order to specify the context for the hypotheses pertaining to core and periphery that were presented in chapter two and that will be tested in detail in chapter six. This chapter covers the following topics: (1) the relation between firm size and profitability; (2) the relation between firm and/or industry profitability and industry concentration levels; (3) the more complex relations among firm/industry profitability, absolute firm size, and industry concentration; (4) the relations among firm/industry profitability, absolute firm size, relative firm size, or market share, and industry concentration; (5)...

  10. CHAPTER SIX Empirical Tests of the Core–Periphery Hypotheses
    (pp. 151-180)

    This chapter presents empirical results from a series of tests designed to examine basic hypotheses of the core—periphery model as presented in chapter two. Briefly restated, the testable hypotheses are that core firms earn higher profit rates than do periphery firms; that there is less intragroup profit rate variability within the core than the periphery; and that core firms’ profit rates are less risky than the profit rates of periphery firms.

    The first step in assessing the empirical validity of the coreperiphery hypotheses is a review of fourteen years of data on firm profitability and industry concentration levels drawn...

  11. CHAPTER SEVEN Conclusion
    (pp. 181-192)

    This study has delineated and provided empirical support for a theory of competition and the industrial structure based on the concepts of core and periphery. The historical evidence, the long-term IRS data, and the empirical analysis of the data set of this study provide, with increasing precision and statistical power, a consistent view of the role and performance of core and periphery firms. Core firms are large relative to all firms in the economy, possess significant market share held jointly with other core firms in one or more industries, and as a result earn profit rates which are significantly higher...

  12. Bibliography
    (pp. 193-204)
  13. Index
    (pp. 205-208)
  14. Back Matter
    (pp. 209-209)