Chapter 16 Inter-industry studies of structure and performance

This chapter discusses inter-industry studies of the relations among various measures of market structure, conduct, and performance. It discusses that tradition has indeed uncovered many stable, robust, and empirical regularities. Inter-industry research has taught much about the way markets look, especially within the manufacturing sector in developed economies, even if it has not shown exactly the way markets work. Work in some areas has produced no clear picture of the important patterns in the data, and non-manufacturing industries have not received attention commensurate with their importance. But cross-section studies are limited by serious problems of interpretation and measurement. Future inter-industry research should adopt a modest, descriptive orientation and aim to complement case studies by uncovering robust empirical regularities that can be used to evaluate and develop theoretical tools. Much of the most persuasive recent work relies on nonstandard data sources, particularly panel data that can be used to deal with disequilibrium problems and industry-specific data, which mitigate the problem of unobservable industry-specific variables.