STAGE I: Introduction
In the introduction, there are three things to include:
a) Clearly state the name of the industry that you wish to understand more or explain. Next, identify the problem leading up to the study of it, such as high-cost industry; little competition or not; is it capital- or labor-intensive etc.? Here, you may also include a brief background of your industry. A list of possible industries is shown in chapter 7 in your textbook. Once you have decided on the name of your industry as your topic, locate its corresponding six-digit NAICS code, and state how you plan to collect your data. Also, state whether your industry is operating in foreign countries (export and import), and if so, offer examples of some exporting and importing countries.
b) State the importance of resolving the problem facing the industry in the US economy. For example, if you choose the Airline Industry, you may wish to find out whether the industry is competitive or not.
c) State the purpose or the central theme of your paper. The purpose is to two-fold:
i) Theoretical: that is to explain how structure influences conduct and subsequently the performance of the industry.
ii) Empirical: to collect data on profit and the explanatory variables, and show whether a long-term relationship exists between profit and concentration ratio. Regression Model is on P.84
