Abstract
Despite growing criticism, the Structure, Conduct, Performance (SCP) paradigm for examining industrial behaviour survives. However, most applications remain concerned with manufacturing industry rather than services in general and the tourism industry in particular. It may be the SCP approach has not been applied to such industries on the grounds that they are difficult to model because of their unique characteristics and because of a lack of data. This study seeks to test the general applicability of the SCP approach in tourism via the vehicle of the UK hotel industry. The Schmalensee approach of generating ‘stylised facts’ is adopted by using pooled data for 65 hotel companies over a five year period. It is felt that the applicability of the approach has been demonstrated, that the relationship between the variables is dynamic but firm profitability is also affected by firm-specific effects.
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