DYNAMICS OF MARKET-STRUCTURE, ADVERTISING AND PROFITABILITY - A VAR APPROACH

The purpose of this study is to provide an econometric characterizatio n of the dynamic interrelationship among structure, conduct and perfor mance variables with a vector autoregressive (VAR) model. Particular a ttention will be given to the causality and response patterns of the v ariable involved. In the light of our desire to ascertain descriptive characterizations of historical behaviour, we let the data speak for i tself. The result suggests a weak relationship existing between market structure and profitability.