1. Before submitting the term paper, students will be guided through step by step by presenting each component part separately for evaluation by the professor as follows:
2. The Industry name and its 6-digit NAICS code, the purpose, and a brief background

NOTE: This assignment is not gradable. The assigned grade will indicate whether you have provided the information below.

Identify the name of the industry that you will base your term paper on and its corresponding 6 NAICS digit code. In a single paragraph, state the following:

1. The name of your industry
2. The six- digit NAICS code
3. How you plan to collect your data (source). See industry access data.
4. The purpose of your paper
5. Brief background of your industry.

For example, the purpose of this research paper is to describe an industry in term s of its structure, conduct and performance. A list of possible industries is shown on Page 205 in your text Book. State whether your industry caters for the local and foreign markets.

1. The Theoretical section explaining the relationship between Industry performance and each of the explanatory variables of structure and conduct.

Theoretical Framework. This assignment is not gradable

For this week, you will focus on the theoretical framework; don’t start to collect the data as yet. This phase of your paper is explanatory or theoretical.

Theoretical Framework refers to how each independent variable is related to performance, a measure of profitability.

This section identifies the dependent variable and the independent variables.

The Dependent Variable is the Industry Performance. A typical measure of performance is Net Revenue

Independent Variables include the elements of market structure and market conduct (see chapter 7)

1. CR4

2. Technology

3. Demand and Market Conditions

4.Potential for entry

CONDUCT (pricing strategy): Define and list the elements of conduct

1. Pricing behavior
2. Integration
3. Research and Development

Define and the explain how each independent variable influence industry performance.

For example, CR4 or concentration ratio is a measure of the percentage of industry sales controlled by top large four companies. If the CR4 exceeds at least 70 percent of industry sales, then these companies as a group can restrict sales, raise prices and thus result in high profits for the industry. Hence, the relationship between CR4 and Profitability id positives.

NEXT: offer at least two scholarly articles of how others (existing literature) describe such a relationship as well. This is will be part of your reference page. You should have at least two scholarly articles.

Do the same for technology, market conditions, and pricing (define, and explain the type of relationship

Next week , we will focus on collecting data on the industry for at least 10 years.

1. Data collection and sources of secondary data

Data Collection

Before you start to do the write up of your Term Paper, you should have a plan. I will recommend that you do a pre-stage as follows before you start to write. This pre-stage will serve as an outline/guide to do your term paper write-up.

Pre stage : Industry variables with profit as the dependent variable (performance)

1. Identify the name of the industry that you wish to investigate and its six-digit code.
2. The variables that you wish to examine for your industry is based a paradigm- a framework that you will use to examine the evidence of the industry. This framework is called the Structure-Conduct -Performance, following porter’s five forces of an industry’s profitability in the long run. The variable that represents the performance of an industry is profit for at least a 10- year period (long -run). Use the table below to collect data for 10 years.

Table showing the profit data over time and related industry variables for the past twenty-five years

I: Name of Industry: _________________________________________________________________

II: NAICS SIX-DIGIT CODE: _______________________________________________________________

Years	Profit/Sales/Revenue	CR4		Comments
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2013
2014
2015
2016

After you have collected the annual data for profit (or sales or net revenues), try to have a sense of the data by constructing a Trend Line, that is show a scatter plot and line chart between Profit and Years; and CR4 and years. IS there a relationship? Positive, negative, or no relationship. This is your research question. According to the structure of the industry, profit can be explained to be positive or zero.

Exploratory Data Analysis

Research question: IS the long run profit increasing or decreasing over time. Use secondary data and existing literature to answer my research question.

If your industry long run profit is positive, offer some evidences as support from the articles that you have listed above.

Once you have some idea of your overall paper, you can now begin to put thoughts in writing

MG 640 Industry Paper and Grading Rubrics

STAGE I: Topic and Approach to your paper……………..………..(15%)

Outline of Industry Analysis Paper

STAGE I: Introduction

In the introduction, there are three things to include:

1. 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; few 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 text book. Once you have decided on the name of your industry as your topic, locate its corresponding 6 NAICS digit code, and how you plan to collect your data. Also, state whether your industry is operating in foreign countries (export and import), and if so, offer some examples of to some exporting and importing countries.
2. State the importance of resolving 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.
3. 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 exist between profit and concentration ratio. Regression Model is on P.84

STAGE II: Body of the paper ……………………………………………...……..(70%)

In this section, discuss the theoretical framework and empirical findings of your industry.

Purpose: To offer an analysis of the industry in terms of its structure, conduct and performance. The research question is whether structure and conduct influence the performance of the industry over time.

Theory: The standard theoretical framework or paradigm states that the industry’s structure influences the pricing, and thus the profitability of the industry

Theoretical Framework: Show how the independent variables affect the performance (dependent variable) of the industry over the past ten years. A measure of performance is profit or net revenue. The key independent variables are concentration ratio (CR4), Market size and Technology. Here, you will define and show the theoretical relationship (state whether it positive or negative) and then offer some evidence from the existing literature.

Empirical Findings:

Research question: IS the long run profit increasing or decreasing over time. Use secondary data and existing literature to answer my research question

Here, you will focus your study on profit and only one key independent variable for the last ten years. That is, collect data on profit and CR4 for ten years. Next, draw a scatter plot for performance and CR4. Is there a long-term trend line? Is the relationship positive or negative as expected in the theoretical section above? See Regression Analysis on Page 84 in your textbook

STAGE III: Summary, Conclusion and References…………………………..(10%)

1. Summary: in about one paragraph or so, summarize the key findings of your industry.
2. Conclusion: about two sentences or so: suggest some improvement about the S-C-P approach or any other areas such as data collection or issues related to your findings about the purpose of your paper; or state your recommendations or suggestions for future research or the main point of your paper. In other words, have you adequately answered your research question or purpose of your paper?
3. References: In-text Citations (quote least 2 sources); paraphrase and appropriate referencing. Reference page: two or more sources-hanging indentation