Industrial Organization & REITs

The Concept of Industrial Organization

Industrial organization is considered within the context of market structure. Market structure refers to the character of competition within a product market. Variations in the level of competition occur along a continuum ranging from pure monopoly (highly concentrated markets) at one terminus to pure competition (competitive markets with low concentration) at the polar extreme. Market structure also may be defined within the contexts of (1) the numbers of firms and buyers, (2) product substitution, and (3) barriers to entry and exit (Byrns & Stone, 1993).

A concept that is now under scrutiny is that the resources and competencies of wealth-creating institutions are largely independent of each other; and that individual enterprises are best able to advance their economic objectives, and those of society, by competition, rather than cooperation. While this concept has been severely challenged only over t

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of zero to the explanatory variables other than the one whose power was being tested, Ravenscraft presumed that he had knowledge of the true values of these other variables. As Bothwell, Cooley, and Hall did, however, Ravenscraft included in his set of equations explanatory variables which were in fact different measures of the same factor·industry concentration. As noted in the discussion of the Bothwell, Cooley, and Hall study, placing all of these measures into a single set of equations as separate explanatory variables: (1) would unjustifiably strengthen the overall impact of concentration on industry profits, if positive values were assigned to each variable; or (2) weakens the relative impact of any one of the variables, when all of the others are assigned a value of zero (Waterson, 1995). Bothwell, Cooley, and Hall weakened the relative impact of the variable whose strength was being tested, by assigning zero values to several different measures of the same factor. Ravenscraft, on the other hand, unjustifiably intensified the overall impact of concentration on industry profits by assigning positive values to several different measures of the same factor. In each of these procedures, multicollinearity became a factor.
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Some common words found in the essay are:
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Approximate Word count = 9584
Approximate Pages = 38 (250 words per page)

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