| Abstract: | The objective of this study is to develop a simultaneous equations model of profitability, concentration, advertising expenditures and research and development outlays for the food manufacturing indushies in the United States. The data used in the estimation are subjected to regression diagnostics in an effort to determine the importance to the estimation results of a subset of the data that can have a disproportionate influence. The estimation results, especially for the advertising expenditures relationship and the research and development outlays equation, do change when a truncated data sample (based on the omission of the outliers) is used. This serves partly to explain why there is some disagreement in the literature on market structure and economic performance with regard to the impact of several economic factors. |
