Analysis of the Motor Vehicles industry

STAGE I: Introduction
In the introduction, there are three things to include:
a) Clearly state the name of the industry that you wish to understand more or explain. Next, identify the problem
leading up to the study of it, such as high-cost industry; little competition or not; is it capital- or labor-intensive
etc.? Here, you may also include a brief background of your industry. A list of possible industries is shown in
chapter 7 in your textbook. Once you have decided on the name of your industry as your topic, locate its
corresponding six-digit NAICS code, and state how you plan to collect your data. Also, state whether your
industry is operating in foreign countries (export and import), and if so, offer examples of some exporting and
importing countries.
b) State the importance of resolving the problem facing the industry in the US economy. For example, if you
choose the Airline Industry, you may wish to find out whether the industry is competitive or not.
c) State the purpose or the central theme of your paper. The purpose is to two-fold:
i) Theoretical: that is to explain how structure influences conduct and subsequently the performance of the
industry.
ii) Empirical: to collect data on profit and the explanatory variables, and show whether a long-term relationship
exists between profit and concentration ratio. Regression Model is on P.84
STAGE II: Body of the paper…………………………………………………….. (70%)
In this section, discuss the theoretical framework and empirical findings of your industry.
Purpose: To offer an analysis of the industry in terms of its structure, conduct and performance. The research
question is whether structure and conduct influence the performance of the industry over time.
Theory: The standard theoretical framework or paradigm states that the industry’s structure influences the
pricing, and thus the profitability of the industry.
Theoretical Framework: Show how the independent variables affect the performance (dependent variable) of the
industry over the past ten years. A measure of performance is profit or net revenue. The key independent
variables are concentration ratio (CR4), Market size and Technology. Here, you will define and show the
theoretical relationship (state whether it is positive or negative) and then offer some evidence from the existing
literature.
Empirical Findings:
Research question: IS the long-run profit increasing or decreasing over time. Use secondary data and existing
literature to answer my research question
Here, you will focus your study on profit and only one key independent variable for the last ten years. That is,
collect data on profit and CR4 for ten years. Next, draw a scatter plot for performance and CR4. Is there a longterm trend line? Is the relationship positive or negative as expected in the theoretical section above? See
Regression Analysis on Page 84 in your textbook.

STAGE III: Summary, Conclusion and References………………………….. (10%)
a) Summary: In about one paragraph or so, summarize the key findings of your industry.
b) Conclusion: In about two sentences or so, suggest some improvement about the S-C-P approach, or any other
areas, such as data collection, or issues related to your findings about the purpose of your paper; or state your
recommendations or suggestions for future research or the main point of your paper. In other words, have you
adequately answered your research question or purpose of your paper?

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