Economic Analysis: Theory and Practice
 

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Improving the methodology for industry analysis based on the Harvard paradigm

Vol. 18, Iss. 10, OCTOBER 2019

Received: 4 September 2019

Received in revised form: 13 September 2019

Accepted: 25 September 2019

Available online: 30 October 2019

Subject Heading: THEORY OF ECONOMIC ANALYSIS

JEL Classification: L10

Pages: 1847–1880

https://doi.org/10.24891/ea.18.10.1847

Kogdenko V.G. National Research Nuclear University MEPhI, Moscow, Russian Federation
kogdenko7@mail.ru

https://orcid.org/0000-0001-9732-1174

Subject The article addresses the development of industry analysis within the Harvard paradigm.
Objectives The aim is to generalize the industry analysis algorithms and justify the methodology, using the SPARK information resource.
Methods The study rests on general scientific principles and methods of research, like abstraction, generalization of approaches of domestic and foreign authors to industry analysis.
Results The paper presents an industry analysis technique that includes four stages. The first explores basic industry conditions based on qualitative and quantitative financial information. At the second stage, the industry structure, its cyclicality and volatility of industry indicators are assessed. The third stage deals with analyzing the behavior of industry's companies in terms of operating, investment and financial activities. At the fourth stage, the possibility of creating value for industry companies, their dynamics and the industry's contribution to GDP are analyzed. The technique has been tested on companies operating in the non-ferrous metals industry.
Conclusions The main forces of competition are the intra-industry competition and market power of buyers. The efficiency of individual large businesses achieves the required profitability, however, the entire industry does not create value. The industry's contribution to GDP is declining, which is generally the case in the primary sector of the economy.

Keywords: industry analysis, Harvard, paradigm, company behavior

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