Characteristics of Marble Industry in Egypt: Structure, Conduct, and Performance

Selim, Tarek and Kandil, Azza (2006): Characteristics of Marble Industry in Egypt: Structure, Conduct, and Performance. Published in: International Business and Economics Research Journal , Vol. 5, No. 3 (March 2006)

Abstract

This paper analyzes marble extraction and production in Egypt from an applied industrial economics point of view. The marble industry in Egypt could be a promising sector if regulated properly. Market structure, conduct and performance is analyzed including degree of differentiation, nature of competition, barriers to entry, and needed regulations. Technically, production matches increasing returns of a Cobb Douglas form Q(K,L)= (K power 0.89)*(L power 1.33) while cost structure follows declining average cost with entry C(Q)=gamma*(Q power -0.55) . Factor inputs in production are non-complementary with $1000 of capital substitutable by 7.5 units of labor. Efficiency concerns necessitate deep technological segmentation with declining profitability. Critically needed regulations are related to technological use in extraction and labor allocation in production. For higher efficiency, the industry should become more capital intensive even though the Egyptian economy is undeniably labor abundant.

• Item Type: MPRA Paper
• Language: English
• Keywords: Marble industry, Egypt economy, industry analysis, technology segmentation, Cobb-Douglas production, capital labor substitution, cost structure, capital intensity, labor abundance, industrial strategy
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L11 - Production, Pricing, and Market Structure ; Size Distribution of Firms; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification, and Scope; L - Industrial Organization > L7 - Industry Studies: Primary Products and Construction > L72 - Mining, Extraction, and Refining: Other Nonrenewable Resources; L - Industrial Organization > L7 - Industry Studies: Primary Products and Construction > L74 - Construction; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M2 - Business Economics > M21 - Business Economics

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