Munich Personal RePEc Archive

Industrial Organization: Indonesian Manufacture

Widodo, Tri (2003): Industrial Organization: Indonesian Manufacture. Published in: Journal of Indonesian Economy and Business (JIEB) , Vol. 20, No. 5 (31 October 2005): pp. 15-30.

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Structure-Conduct-Performance (SCP) is a central issue in the Industrial-Organization (IO). Analysis of SCP typically uses linear partial and simple approaches: Structure affects Conduct and then Conduct affects Performance. In the real world, Structure, Conduct and Performance have associated relationship with each other interactively and simultaneously. This paper uses analytical approach to scrutinizes the model of interactive SCP of Indonesian manufacturing industry and to apply simultaneous equations econometric models. This paper concludes that the SCP paradigm may be improperly giving to much weight to concentration as an explanatory variable for industry conduct and performance. In the case of Indonesian manufacture, concentration does not occupy the central place of the SCP paradigm.

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