Profitability Versus Market Structure - Application of the SCP Model on the Panel Data

The analytical background for this research is provided by the Structure-Conduct-Performance paradigm (SCP). In this view market structure determines the behavior of the firms (market conduct) and finally determines market performance. This paper explains the role of market structure on profitability in the Polish manufacturing firms based on panel data static analysis. The empirical results have shown that relationships among structure, conduct, and performance are interactive and more complex than the basic view based on the linear SCP framework. This statement is based on The New Industrial Organization Theory. The panel data for this analysis comprises yearly data (F01 and F02 CSO) for the period 1996-2004 for manufacturing companies