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An Introduction to Industrial Economics 1st Edition P. J.
Devine Digital Instant Download
Author(s): P. J. Devine, N. Lee, W. J. Tyson, R. M. Jones
ISBN(s): 9781351244633, 1351244639
Edition: 1
File Details: PDF, 54.90 MB
Year: 2019
Language: english
ROUTLEDGE LIBRARY EDITIONS:
INDUSTRIAL ECONOMICS

Volume 14

AN INTRODUCTION TO
INDUSTRIAL ECONOMICS
 AN INTRODUCTION TO
INDUSTRIAL ECONOMICS

P. J. DEVINE, N. LEE, R. M. JONES AND

W. J. TYSON

I~~~o~:~!n~~~up
LONDON AND NEW YORK
First published in 1974 by George Allen & Unwin
Third Edition published in 1979
Fourth Edition published in 1985
This edition first published in 2018
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
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Routledge is an imprint of the Taylor & Francis Group, an informa business
© 1979, 1985 George Allen & Unwin (Publishers) Ltd
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AN INTRODUCTION TO INDUSTRIAL
ECONOMICS

BY

P. J. DEVINE

N.LEE

R. M. JONES

W. J. TYSON

Fourth Edition

London
UNWINHYMAN
Boston Sydney
This book is copyright under the Berne Convention. No
reproduction without permission. All rights reserved.
© George Allen & Unwin (Publishers) Ltd, 1979, 1985

Unwin Hyman Ltd,

15/17 Broadwick Street, London Wl V lFP, UK

Allen & Unwin Inc.,

8 Winchester Place, Winchester, Mass. 01890, USA

George Allen & Unwin Australia Pty Ltd,

8 Napier Street, North Sydney, NSW 2060, Australia

Third Edition published in 1979

Reprinted in 1982
Fourth Edition published in 1985
Second impression 1986
Third impression 1988

British Library Cataloguing in Publication Data

An introduction to industrial economics. - 4th ed.

1. Industrial organization (Economic theory)
I. Devine, P.J.
338 HD 2326
ISBN 0-04-338124-3

Library of Congress Cataloging in Publication Data

Main entry under title:

An introduction to industrial economics.
Bibliography: p.
Includes index.
1. Industrial organization (Economic theory)
2. Industry and state - Great Britain. I. Devine, P.J.
HD2326.157 1985 338 85-1272
ISBN 0-04-338124-3 (pbk.: alk. paper)

Set in 10 on 11 point Times and printed by Biddies Ltd,

Guildford, Surrey
Preface to the First Edition

Industrial economics is commonly regarded as one of the more descriptive

branches of economics, having a tenuous and uneasy relationship with neo-
classical microeconomic theory. The false dichotomy between description and
theory that is implicit in this kind of distinction has become more apparent
with increased attention to new forms of theorising based upon behavioural
and institutional assumptions borrowed from industrial economics and the
increased use in both subject areas of econometric methods of hypothesis
testing. It therefore seemed that a synthetic review of the economic analysis of
industrial behaviour, which drew upon both these traditions, was needed.
The book is intended to serve this purpose. It is written for students who
have previously studied economic theory at first-year··university level or its
equivalent, but it does not presume any prior knowledge of industrial economics
as such. It is intended for the critical reader who wishes to know the present
state of knowledge in the subject and to have its principal weaknesses exposed.
It starts with an historical and analytical review of the sqope and method of
industrial economics. This is followed by a chapter on the industrial and
market environments within which firms operate. It contains a review of the
methods that have been used to measure the structural features of these
environments. Chapters 3-5 relate to the individual firm, the first examining
the static concept of the firm and the second two analysing the firm in more
dynamic terms as an organism growing by means of diversification, merger
and innovative activities. Chapters 6 and 7 are concerned with two important
areas of decision making - marketing and investment - and review both
theoretical models and empirical studies to illuminate such behaviour. Chapter
8 provides an introduction to the remaining three chapters in the book by
examining the theoretical and empirical problems arising in the measurement
of business performance. Chapters 9 and 10 contain a survey and critique of
government industrial policy and of its effect on private and publicly owned
industry. The book ends with an examination of government locational and
regional policy and its impact on industry.
The authorship of each of these chapters is shown in the Contents. While
there has been a great deal of collaboration in the preparation of the book,
each contributor's responsibility is limited to the particular chapters of which
he is an author. In conclusion, we wish to express our appreciation to our
colleagues in the Economics Department of the University of Manchester
for their advice and encouragement although absolving them from responsibility
for any errors that remain.

P.J.D. N.L. R. M.J. W.J.T.

Preface to the Third Edition

The structure and purpose of this edition are the same as those of the two previous
editions, but due to developments in the subject all chapters except the first
have been extensively revised. In part this takes the form of new theoretical
and empirical material, relating primarily to the UK situation, on topics
already included in the earlier editions. However, a number of new topics have
also been introduced, which include: structure-performance models (Chapter
2), the labour-managed firm (Chapter 3), the determinants of advertising
activity (Chapter 6), growth accounting and X-efficiency (Chapter 8), govern-
mental industrial policy (Chapter 9), industrial location and urban area
problems (Chapter 11), and the impact of regional policies (Chapter 11). Each
chapter now concludes with brief guidance on further reading, followed by more
detailed notes and references that cross-refer to the text.
As in previous editions, there has been a great deal of collaboration in the
preparation of this book, but each contributor's responsibility is limited to the
particular chapters of which he is an author, as indicated in the Contents.

Preface to the Fourth Edition

This edition continues the process of revision and up-dating undertaken in the
third edition. All chapters, except Chapter 1, have been revised, although some
more extensively than others, and a new chapter has been added. The statist-
ical material in Chapters 2-11 has been up-dated and the text of these chapters
has been amended to take account of theoretical developments and important
empirical studies undertaken since the last edition.
The new chapter (Chapter 12) focuses primarily on policy developments
between 1979, when a new Conservative government came into office, and
1984. It starts with a review of the continuing process of deindustrialisation
within the context of world recession. Policy is examined under three main
headings: competition and industrial policy; policy towards the public enter-
prise sector; and regional and urban policy. Particular attention is paid to the
issue of privatisation. The chapter ends with a general assessment of policy
developments over the period.

P.J.D. N.L. R.M.J. W.J.T.

November 1984
University of Manchester
Contents

Preface to the First Edition page vii

Preface to the Third Edition viii

SCOPE AND METHOD OF INDUSTRIAL ECONOMICS

N. Lee 1
1.1 Introduction 1
1.2 Antecedents of industrial economics 2
1.3 Objectives in industrial economics 7
1.4 Firms, industries and markets 11
1.5 Methodology: the search for a synthesis 14
Appendix: Data collection and interpretation 21
Notes and references 24

2 INDUSTRIAL AND MARKET STRUCTURE N. Lee

( sections 2.1-2.6); R. M. Jones and N. Lee ( sections 2.7-2.12) 27
2. I Introduction 27
2.2 Industry: definitional problems 27
2.3 Industrial structure in Britain 31
2.4 Patterns of industrial structure 32
2.5 Goods v. services 36
2.6 Industrial interdependence 40
2.7 Markets and market structure 46
2.8 Structure-performance models 48
2.9 Definition and measurement of market structures 50
2.10 Determinants of market structure 57
2.11 Relationships between market structure and performance 63
Notes and references 67

3 THE FIRM P. J. Devine 71

3.1 Introduction 71
3.2 The firm I: the theory of the firm 71
3.3 The firm II: some institutional characteristics 83
3.4 Ownership, control and objectives 100
3.5 Behaviourism 119
3.6 Conclusion 122
Notes and references 124

4 CORPORATE GROWTH P. J. Devine 134

4.1 Introduction 134
X An Introduction to Industrial Economics
4.2 The theory of the growth of the firm: basic concepts 134
4.3 A simple model and some developments 150
4.4 Some empirical findings 160
4.5 Conclusion 176
Notes and references 177

5 DIVERSIFICATION, MERGER AND

INNOVATION P. J. Devine 183
5.1 Introduction 183
5.2 Diversification 183
5.3 Merger 192
5.4 Innovation 208
Notes and references 227

6 PRICING AND ADVERTISING N. Lee 236

6.1 Introduction 236
6.2 An overview of price theory 237
6.3 Pricing in practice 244
6.4 Non-price competition 253
6.5 Advertising 258
6.6 Conclusion 265
Notes and references 267

7 THE INVESTMENT DECISION R. M. Jones 270

7.1 Introduction 270
7.2 Methods of investment appraisal 271
7.3 The investment decision in practice 277
7.4 An assessment of investment appraisal techniques 280
7.5 Risk, uncertainty and decision making 285
7.6 Sources of finance 288
7.7 Company size and investment 292
7.8 Aggregate investment in the United Kingdom 294
Notes and references 298

8 PERFORMANCE MEASUREMENT N. Lee 301

8.1 Introduction 301
8.2 Profit measures 302
8.3 Productivity measures and growth accounting 305
8.4 Perfect competition and workable competition 314
8.5 Productive efficiency and X-efficiency 321
8.6 Conclusion 327
Notes and references 328

9 STATE INTERVENTION IN THE PRIVATE SECTOR

P. J. Devine 331
9.1 Introduction 331
9.2 The legal and institutional framework 335
 Contents xi
9.3 Competition policy 348
9.4 Industrial policy 370
9.5 Conclusion 385
Notes and references 388

10 GOVERNMENT RELATIONS WITH THE PUBLIC

INDUSTRIAL SECTOR W. J. Tyson 398
10.1 Introduction 398
10.2 Objectives of the nationalised industries 408
10.3 Financial performance of the nationalised industries 415
I 0.4 Criteria for pricing and investment policies for the
nationalised industries 420
10.5 Pricing performance 424
10.6 Investment performance 431
10.7 Conclusion 437
Notes and references 439

11 GOVERNMENT POLICY AND THE LOCATION OF

INDUSTRY N. Lee 443
11.1 Introduction 443
11.2 Industrial location in Britain: an overview 443
11.3 Development of location theory 452
11.4 Evaluation of the profit-maximising model . 458
11.5 Industrial location and regional and urban problems 468
11.6 Development of government policy (1928-79) 475
11.7 Impact-of central government policy .480
11.8 Policy instruments: comparative evaluation 485
Notes and references 490

12 GOVERNMENT POLICY SINCE 1979

P.J.Devine, N. Lee and W.J. Tyson 494
12.1 Introduction 494
12.2 Competition and industrial policy 498
12.3 Policy towards the public enterprise sector 504
12.4 Policy towards the location of industry 509
12.5 Conclusion 513
Notes and references 516

Index 518
1 Scope and Method of
Industrial Economics
1.1 INTRODUCTION

Although the study ofindustry by economists is as old as the study of economics

itself,1 the term 'industrial economics' is of quite recent origin. It appears to
haye crept into the literature in the early 1950s via the writings of Andrews. 2
Prior to this the economic analysis of industry was not recognised as a
distinctive branch of economics in many quarters, and where it was, it was
given a variety of different names, 'economics of industry', 'industry and
trade', 'business economics', 'commerce' and 'industrial organisation' being
the ones most frequently encountered. 'Industrial organisation' is still a
commonly used term in the United States.
The absence of any generally accepted name for this area of economics is
indicative of a.lack of consensus not only as to the range of the subject but
also as to its objectives and methodology. The editorial introduction to the
American Economic Association's Readings in Industrial Organisation and
Public Policy, published in 1958, indicates that at that time:

... the field of industrial organisation and public policy has neither a well-
defined content nor precise boundaries: Some [graduate] courses emphasize
the organisation and characteristics of industrial markets in general and of
some markets in particular. Others are designed to show the relationship
between industrial markets and price theory and to modify and extend that
theory in the light of the facts of industrial organisation. Still others are
concerned primarily with public policy issues, with little attention given to
an analysis of market organisation or price theory. 3

A survey some ten years later of researchers and teachers in this field has drawn
very similar conclusions : 'The diversity [of replies] supports the view t,hat
industrial organisation is not a clearly defined, homogeneous entity . . . The
field continues to be broadly eclectic and evolving.'4
The reasons for this absence of a consensus lie in the historical develop-
ment of the economic analysis of industrial and business behaviour and
cannot be properly understood without reference to it. This is the subject
of section 1.2. Arising from this historical account it is possible to identify
a number of areas of current controversy in the subject of industrial
economics, principally related to the objectives, units, of analysis and methods
of the subject. These are discussed in sections 1.3-1.5. In section 1.5 a basis
is outlined for reaching a consensus on the objectives, scope and methodology
of industrial economics that permits its closer integration into the mainstream
of economic analysis. A short review of data sources, their methods of
collection and their use in industrial economics is contained in an appendix
to this chapter.
2 An Introduction to Industrial Economics
1.2 ANTECEDENTS OF INDUSTRIAL ECONOMICS

Central to the explanation of the historical development of the economic

analysis of industrial activity is the methodological division that existed between
the mainstreams of English economic thought and the Historical and Institu-
tional Schools during the late nineteenth and early twentieth centuries. 5 The
former is evident in the writings of J. S. Mill, Jevons and the mathematical
economists at the turn of the century, finding its clearest exposition in Robbins's
An Essay on the Nature and Significance of Economic Science. 6 It has been
characterised by the acceptance of certain behavioural assumptions about indi-
vidual consumers and firms, which were believed to be of widespread appli-
cability, economic analysis taking the form of searching out the logical implica-
tions of these behaviour patterns when confronted by resource scarcity. This
form of analysis readily lent itself to generalised theorising and to the use of
mathematical tools in relatively long and complex chains of reasoning. It also
necessarily involved a high degree of abstraction from the events of the real
world to enable this degree of generalisation to be achieved.
The Historical School, which initially developed in Germany, questioned
the assumed universality of the behavioural assumptions and the mode of
operation of economic forces that was central to the economic analysis of the
English School. Rather, its members argued, these differed significantly from
one country to another and from one period of time to another because they
were conditioned by the institutions that existed within a country at any given
point in time.
Three important inferences for economic analysis were derived from this
basic institutional premise:

(l) Economic analysis should be based upon empirical investigations designed

to establish the nature of the existing institutional framework and the
manner in which it conditions the operation of economic forces. In this
sense theory and analysis are not absolute or universal but relative to
the institutional framework through which they operate.
(2) Since institutions evolve over a period of time they are conditioned by
environments that may no longer exist. Therefore, a proper understand-
ing of their nature and the way in which they may subsequently alter
involves a study of their historical development.
(3) Institutions should not be treated as given in economic analysis, i.e.
as unchanging and unchangeable constraints; rather they should be treated
as capable of modification where in their existing forms they hamper the
operation of economic forces in achieving desired objectives.

Not all economists within the Historical School placed equal emphasis on
each of these three inferen~es. For some the first of these three points was the
most important, and when pushed to its logical limit this became a methodo-
logical plea for inductive empiricism. The second inference led to an emphasis
upon the study of the operation of economic forc:esthrough economic history.
In certain cases this developed further into an investigation for lessons or
'laws' in history concerning the evolution of institutions, which could then be
 Scope and Method of Industrial Economics 3
regarded as fundamental forces operating on the nature and form of economic
activity. The third inference introduced a new radical tone into economic
analysis.
During the 1880s a number of German economists emigrated to the United
States. Prior to that date American economics had mainly fallen under the
influence of the English tradition; but thereafter, especially through the
Institutional School, the influence of the Historical School became quite strong.
Its main protagonists were Wesley Mitchell, Thorstein Veblen and, later, J. R.
Commons. The movement was instrumental in the establishment of the
American Economic Association and exercised a significant influence on its early
history, especially in its advocacy of institutional change. 7 • 8 The influence of
this type of thinking subsequently reached Britain via both Germany and the
United States, but its impact was considerably less than in those two countries.
Howe·;er, in one area of economics its influence was significant - the area
subsequently called 'industrial economics'.
The methodological differences referred to above were taking place during
the period while Marshall was at Cambridge. In tracing their influence on the
work of English economists it is natural to start with their influence on his
writings. The view has been expressed that Marshall's contribution to economic
analysis was to reconcile divergent schools of thought. While limiting his
contribution to that of a synthesiser is clearly a disservice to him, nonetheless
a distinctive feature of his writings was his ability to draw upon and integrate
methods of economic analysis that were apparently in open conflict with each
other. 9 This is true both of his Principles of Economics 10 and even more so of
his Industry and Trade, 65 which may be regarded as one of the early textbooks
in industrial economics. In particular his ability to acknowledge the contri-
butions of the Historical School and the institutionalists and to graft these on to
the English tradition is very apparent in the following extracts from his
writings:

For the sake of simplicity of argument, Ricardo and his followers often
spoke as though they regarded man as a constant quality, and they never gave
themselves enough trouble to study his variations ... They were aware that
the inhabitants of other countries had peculiarities of their own that deserved
study but they seemed to regard such differences as superficial and sure to
be removed, as soon as other nations had got to know that better way
which Englishmen were ready to teach them ... But their most vital fault
was that they did not see how liable to change are the habits and institutions
of industry. 10

The acceptance of this view led in turn to a considerable emphasis on empirical

studies:

... though no one life will reach out to a study in detail of the tactics of every
fight which man has waged with his economic difficulties; yet no study of the
broad problems of economic strategy is likely to be worth much unless it is
combined with an intimate knowledge of the tactics as well as the strategy of
man's struggles against his difficulties in some particular age and country ...
4 An Introduction to Industrial Economics
the direct and formal study of facts, perhaps mainly those of his own age,
will much exceed the study of mere analysis and 'theory', in its demands on
the time of any serious economist. 11

Marshall, however, was not an indiscriminate empmc1st who believed in

collecting factual information for its own sake. His methods provided for the
interplay between induction and deduction, the one complementing and re-
inforcing the other:

Induction, aided by analysis and deduction, brings together appropriate

classes of facts, arranges them, analyses them and infers from them general
statements or laws. Then for a while deduction plays the chief role: it brings
some of these generalisations into association with one another, works from
them tentatively to new and broader generalisations or laws and then calls on
induction again to do the main share of the work in collecting, sifting and
arranging these facts so as to test and 'verify' the new law . 12

While Marshall in his own work integrated the methods of analysis originating
from divergent schools of thought, this was not equally true of many 9f his
contemporaries or successors. The most important illustration of this has been
the development of microeconomic theory within the received English
tradition separate from, and often in conflict with, industrial economics with its
strongly institutional antecedents. The reasons for this separate development
are not fully known, but two possible explanations merit consideration apart
from the obvious divisive influence of doctrinaire adherence to particular
schools of economic thinking.
The first explanation is that the synthesised method of study outlined by
Marshall demands a wide range of different kinds of skill that may not be
easily mastered by one person. This point has been emphasised by Jevons 13 and
more recently by Koopmans:

The task of linking concepts with observations demands a great deal of

detailed knowledge of the realities of economic life as well as of processes of
measurement. On the other hand the reasoning from postulates to conclusions,
and the appraisal of the postulates with regard to their suitability as a basis
for reasoning, increasingly demands logical and mathematical skills not often
found united in the persons most suited for the first category of tasks. The
testing of conclusions, besides requiring the skills involved in aligning con-
cepts and phenomena, also depends in many cases on the handling of subtle
procedures of statistical inference. 14

One 'solution' to this problem is to seek refuge in the division of labour, and
this was certainly accepted by Jevons, who advocated the breakup of the science
into separate branches or even separate sciences. The practice of specialisation,
however, has its disadvantages, and these are most pronounced, as we shall
see, where there is no effective provision for the co-ordination of the specialist
activities and for sufficient interplay between them.
A second feature that may have contributed to the divorce of these two
 Scope and Method of Industrial Economics 5
approaches concerns the relationship between the development of economics in
the university curriculum and the vocational requirements of business education.
During the 1960s and 1970s business schools and postgraduate courses in
management education have been established at a number of universities with
official encouragement, on the grounds that Britain's unsatisfactory economic
performance has been partly attributable to inadequate senior-management
education, especially in comparison with the United States and certain Western
European countries. It is interesting to observe that precisely the same views were
being expressed at the turn of the century and were to varying degrees responsible
for the establishment of new economics faculties or degree courses at a large
number of universities, including Birmingham, Cambridge, the London
School of Economics and Manchester. 15 - 17 In each of these cases industrial
firms contributed to their finances and expected there to be some vocational
element in the courses provided. In most instances the universities concerned
were careful to avoid any commitment to a narrowly defined form of
vocational training, and as the years proceeded the strength of this particular
influence tended to diminish. Nevertheless, it gave a significant impetus to
the study of industrial and business behaviour within economic faculties, and
in certain instances some degree of identification with vocational training may
have contributed to its separation from the mainstream development in micro-
economic theory.
One of the clearest examples of this development is shown in the work and
writings of Sir William Ashley. While at Oxford as an undergraduate in the
1880s Ashley came under the influence of the Historical School through
Leslie, Toynbee (his one-time tutor) and Ingram. In his inaugural lecture on his
appointment to the Chair of Political Economy and Constitutional History at
Toronto in 1888 he stated the methodological standpoint currently taken by
many of the younger economists, including himself:

... a Political Economy is possible which shall be of real value to society, in

it the old doctrines will be shown to be not untrue, but to have only· a
relative truth, and to deserve a much less important place than has been
assigned to them; and the direction for fruitful work is no longer in the
pursuit of the abstractive deductive method which has done as much service
as it is capable of but in following new methods of investigation - historical,
statistical, inductive ... 1 7

After leaving Toronto he held a position at Harvard for ten years before being
invited in 190I to take the post of Professor at the newly created Faculty of
Commerce at Birmingham University. He brought an institutional view of
economics into a faculty established in the belief that it had a contribution
to make in business education. His views were most clearly reflected in the
emphasis that he gave to 'business economics' in contrast to the more firmly
established 'political economy'. 18 Business economics, in his view, consisted of
two elements. The first element was mainly descriptive and aimed to provide
the businessman with a survey of the industrial and commercial organisations
of his own country and of the other major countries with which he might
come in contact. It would examine their natural resources, leading industries,
6 An Introduction to Industrial Economics
lines . of traffic, supplies of capital, labour forces, methods of trade and
commercial policy. The second component of business economics related to
business policy and decision making, covering such matters as pricing, location,
finance, labour and commercial relations.
The longer term influence of Ashley on the advancement of the economic
analysis of business and industrial behaviour is difficult to measure. In part his
influence lay in the development of what would now be regarded as managerial
economics - the multidisciplinary study of business decision making. On the
other hand, a number of later industrial economists of prominence, such as
Allen, 19 were ex-students of Ashley and to some degree were obviously influenced
by his mode of thinking.
Quite separately other developments in the mainstream of microeconomic
theory were taking place. With the systemisation of the perfect competition
model based upon marginal analysis a fundamental inconsistency came to light.
If increasing returns were prevalent in industry, how could an equilibrium
position that satisfied the conditions of the perfect competition model be
achieved at the individual firm level?20 The answer, developed separately by
Joan Robinson 21 and E. H. Chamberlin, 22 took the form of the downward-
sloping individual firm's demand curve. While the initiative to this theoretical
development was partially empirical, i.e. the observed phenomenon of increasing
returns, the response to this initiative was essentially within the mainstream
English tradition of economic analysis in general and of marginalism in
particular.
The reaction of these developments on the 'institutional' analysis of industry
is difficult to gauge. P. W. S. Andrews regarded them as retrograde influences,
which deflected attention away from the industry to the individual firm. 23
Others believed that the publication of Chamberlin's work acted as a con-
siderable stimulus to both empirical and theoretical work in the United States
during the 1930s,24 although this was almost certainly in part due to the con-
temporaneous publication ofa related empirical study by Berle and Means. 2 5 The
first courses in industrial organisation were started at Harvard in the early
1930s under Chamberlin and Mason. The influence of Chamberlin's work is
evident in the early attention that these courses gave to the definition and
classification of more realistic market structures. One of the early Harvard
PhD students to work within this framework was J. S. Bain, who was later to
play an important role in the development and popularisation of the market
structure-conduct-performance paradigm in industrial economics. 4
However, despite this the gulf between 'institutional' and 'mainstream'
methods of economic analysis remained largely intact throughout the 1930s and
1940s. Its extent was made apparent by the furore following the publication of
the results of an empirical inquiry into the pricing practices of business by
Oxford Economists' Research Group. 26 The details of this controversy
so far as they relate to pricing theory are discussed in Chapter 6, and this
section limits its attention to the controversy's historical and methodological
significance. The controversy arose, not merely because the Oxford Economists
appeared to be questioning the validity of the marginalist principles underlying
received price theory, but because at a more fundamental level it was a debate
about the validity of inductive empiricism and the particular methods of
 Scope and Method of Industrial Economics 7
empirical investigation and interpretation used by them. These methodological
issues are very evident in the writings of Machlup 27 - one of the principal
defendants ofmarginalism. They remain as issues today, although probably in
a more muted form than previously.
Nevertheless, there is some indication that during the 1960s and 1970s this
gulf has been narrowing, due mafnly to two factors. First, ·there has been
a growing awareness among empirical researchers, partly arising from the Hall-
Hitch controversy, 26 of the need to explore the wider implications of their
findings for economic analysis and to become more explicitly involved in the
process of theory formulation. This has been one of the formative influences on
and through the Journal of Industrial Economics, established in 1952, as its
editor, Andrews, has indicated:

Economics needs a workable theory of the behaviour of the individual

business. I venture to suggest that this approach will only be found through
empirical work on actual businesses . . . If we wish to theorize fruitfully
about individual businesses, we must find out what are the facts about their
behaviour and then construct a general theory especially in order to take
account of those facts. 28

Bain has adopted a similar position:

Although I have depended strongly upon received economic theory for con-
cepts and hypotheses ... the present work is definitely not one in a priori price
theory. The emphasis is directly on empirical study concerning issues raised
by such theory, or on the implementation, application and critical testing of
such theory. 29

Second, during the 1960s and 1970s there has been a new emphasis placed on the
formal empirical testing of hypotheses as a means of establishing that theories
are 'acceptable'. While there are dangers in the indiscriminate use of these
testing techniques, which are discussed later, they do have the beneficial side
effect of helping to bring these two divergent schools of thinking closer together.
On the one hand, this new emphasis is leading economists working in the main-
stream of microeconomic theory to enter certain of the traditional areas of
empirical research within industrial economics. On the other, it is forcing the
traditional industrial economist to clarify the objectives of his empirical re-
search and to subject his techniques of investigation to more critical analysis.
The environment is therefore more favourable for an integration of industrial
economics within a modified mainstream of microeconomic analysis. To
indicate how this may be possible it is necessary to terminate this historical
account and turn attention to the objectives and methods of industrial
economics.

1.3 OBJECTIVES IN INDUSTRIAL ECONOMICS

Part of the confusion that has arisen over appropriate methods for the economic
Exploring the Variety of Random
Documents with Different Content
 Business - Teaching Resources
Winter 2025 - Department

Prepared by: Associate Prof. Johnson

Date: July 28, 2025

Results 1: Literature review and discussion

Learning Objective 1: Assessment criteria and rubrics
• Study tips and learning strategies
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Learning Objective 2: Current trends and future directions
• Theoretical framework and methodology
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Learning Objective 3: Learning outcomes and objectives
• Critical analysis and evaluation
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
[Figure 3: Diagram/Chart/Graph]
Learning Objective 4: Problem-solving strategies and techniques
• Interdisciplinary approaches
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Learning Objective 5: Case studies and real-world applications
• Experimental procedures and results
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Formula: [Mathematical expression or equation]
Important: Literature review and discussion
• Case studies and real-world applications
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Formula: [Mathematical expression or equation]
Definition: Fundamental concepts and principles
• Learning outcomes and objectives
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Definition: Learning outcomes and objectives
• Research findings and conclusions
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Key Concept: Current trends and future directions
• Ethical considerations and implications
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Example 9: Ethical considerations and implications
• Critical analysis and evaluation
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Formula: [Mathematical expression or equation]
Abstract 2: Learning outcomes and objectives
Example 10: Literature review and discussion
• Historical development and evolution
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
[Figure 11: Diagram/Chart/Graph]
Example 11: Assessment criteria and rubrics
• Problem-solving strategies and techniques
- Sub-point: Additional details and explanations
- Example: Practical application scenario
[Figure 12: Diagram/Chart/Graph]
Note: Statistical analysis and interpretation
• Study tips and learning strategies
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Definition: Experimental procedures and results
• Statistical analysis and interpretation
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Note: Ethical considerations and implications
• Ethical considerations and implications
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Formula: [Mathematical expression or equation]
[Figure 15: Diagram/Chart/Graph]
Practice Problem 15: Learning outcomes and objectives
• Assessment criteria and rubrics
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Formula: [Mathematical expression or equation]
Note: Practical applications and examples
• Historical development and evolution
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Example 17: Historical development and evolution
• Historical development and evolution
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Formula: [Mathematical expression or equation]
Definition: Best practices and recommendations
• Fundamental concepts and principles
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Practice Problem 19: Best practices and recommendations
• Problem-solving strategies and techniques
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Review 3: Theoretical framework and methodology
Practice Problem 20: Interdisciplinary approaches
• Ethical considerations and implications
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Note: Research findings and conclusions
• Learning outcomes and objectives
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Formula: [Mathematical expression or equation]
Example 22: Fundamental concepts and principles
• Statistical analysis and interpretation
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Formula: [Mathematical expression or equation]
Key Concept: Historical development and evolution
• Interdisciplinary approaches
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Formula: [Mathematical expression or equation]
Remember: Key terms and definitions
• Best practices and recommendations
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
[Figure 25: Diagram/Chart/Graph]
Important: Comparative analysis and synthesis
• Research findings and conclusions
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Definition: Best practices and recommendations
• Historical development and evolution
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Formula: [Mathematical expression or equation]
Definition: Practical applications and examples
• Comparative analysis and synthesis
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Practice Problem 28: Historical development and evolution
• Problem-solving strategies and techniques
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Practice Problem 29: Experimental procedures and results
• Research findings and conclusions
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Formula: [Mathematical expression or equation]
[Figure 30: Diagram/Chart/Graph]
References 4: Critical analysis and evaluation
Definition: Current trends and future directions
• Problem-solving strategies and techniques
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Definition: Best practices and recommendations
• Best practices and recommendations
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Formula: [Mathematical expression or equation]
Remember: Comparative analysis and synthesis
• Comparative analysis and synthesis
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Note: Ethical considerations and implications
• Study tips and learning strategies
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Example 34: Learning outcomes and objectives
• Practical applications and examples
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Formula: [Mathematical expression or equation]
Key Concept: Case studies and real-world applications
• Key terms and definitions
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Important: Problem-solving strategies and techniques
• Problem-solving strategies and techniques
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
[Figure 37: Diagram/Chart/Graph]
Note: Problem-solving strategies and techniques
• Literature review and discussion
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Formula: [Mathematical expression or equation]
[Figure 38: Diagram/Chart/Graph]
Important: Ethical considerations and implications
• Statistical analysis and interpretation
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Formula: [Mathematical expression or equation]
Important: Practical applications and examples
• Theoretical framework and methodology
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Formula: [Mathematical expression or equation]
Results 5: Fundamental concepts and principles
Example 40: Key terms and definitions
• Literature review and discussion
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Remember: Ethical considerations and implications
• Interdisciplinary approaches
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Formula: [Mathematical expression or equation]
Example 42: Key terms and definitions
• Current trends and future directions
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Important: Learning outcomes and objectives
• Case studies and real-world applications
- Sub-point: Additional details and explanations
- Example: Practical application scenario
[Figure 44: Diagram/Chart/Graph]
Note: Problem-solving strategies and techniques
• Research findings and conclusions
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Formula: [Mathematical expression or equation]
[Figure 45: Diagram/Chart/Graph]
Key Concept: Current trends and future directions
• Research findings and conclusions
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Note: Historical development and evolution
• Study tips and learning strategies
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Definition: Case studies and real-world applications
• Learning outcomes and objectives
- Sub-point: Additional details and explanations
- Example: Practical application scenario
Key Concept: Learning outcomes and objectives
• Comparative analysis and synthesis
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Remember: Practical applications and examples
• Fundamental concepts and principles
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Lesson 6: Assessment criteria and rubrics
Note: Fundamental concepts and principles
• Problem-solving strategies and techniques
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
[Figure 51: Diagram/Chart/Graph]
Important: Comparative analysis and synthesis
• Ethical considerations and implications
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
Formula: [Mathematical expression or equation]
Key Concept: Case studies and real-world applications
• Key terms and definitions
- Sub-point: Additional details and explanations
- Example: Practical application scenario
- Note: Important consideration
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