ALVAREZ ET AL.: DUAL STRUCTURAL EQUILIBRIUM 



during the 1959-71 period (Table 3) shows that 

 firms of the smaller sizes (states 2 and 3) increase 

 in number as the industry reaches the structural 

 equilibrium, while firms in states 4 and 5 decrease 

 and firms in the largest size increase in number. 

 This is a consequence of the industry dual equilib- 

 rium conditions of entry and exit identified in the 

 1959-71 period. 



At the structural equilibrium, and in support of 

 the dual equilibrium, the probabilities for firm 

 entry are highest for firms with less than 30 

 employees and for those with more than 300 

 employees. Thus, the least amount of entry ac- 

 tivity will occur within the medium-sized firms. 



Mean Lifetime for Each Size Category 



Mean lifetime values for each size category were 

 calculated (Table 4) and further support the 

 prevalence of a dual equilibrium in the Florida 

 shrimp industry. Mean lifetime represents the 



Table 4. -Mean lifetime in years for each size category for the 

 Florida shrimp processing industry.' 



'Mean lifetime represents the number of years a firm tends to 

 stay in a given size category. In this case, results were multiplied 

 by 2 since each time period equals 2 (yr) in the data. 



^State 1 is not included because it is an absorbing state. 



'Calculated from the transition matrix with the formula 



(1/1 - P,,)- 



■•Time spent in each state for a perfectly mobile industry as cal- 

 culated from the equilibrium size distribution. 



sColumn 2 h- Column 1. 



number of years a firm tends to stay in a given 

 state of nature. The largest firms tend to maintain 

 their size for a greater number of years (13) than 

 firms in any other size category. Firms of sizes 2 

 and 3 have mean lifetime values of 9 yr, while 

 firms of size 4 and size 5 tend to remain for an 

 average of 4 and 7 yr in their respective states. 

 These findings are the result of the firms' 

 probabilities of maintaining their size between 

 any two time periods. Column 2 of Table 4 repre- 

 sents the number of years spent in each size for an 

 equilibrium distribution (perfectly mobile in- 

 dustry); the values are very similar. The data in 

 Column 3 indicate state rigidity where the smaller 

 the ratio, the more rigid the state. State 6 is the 

 most rigid state in the industry, followed by states 

 2, 3, 5, and 4, respectively. 



LITERATURE CITED 



Alvarez, J. 



1974. The Florida shrimp processing industry: Economic 

 structure and marketing channels. M.S. Thesis, Univ. 

 Florida, Gainesville, 168 p. 

 Bain, J. S. 



1968. Industrial organization. John Wiley and Sons, Inc., 

 N.Y., 678 p. 



BiSHIR, J. W., AND D. W. DrEWES. 



1970. Mathematics in the behavioral and social sciences. 

 Harcourt, Brace & World, Inc., N.Y., 714 p. 

 Derman, C, J. G. Leon, and 0. Ingram. 



1973. A guide to probability and application. Holt, Rine- 

 hart, and Winston, Inc., N.Y., 750 p. 

 Florida State Chamber of Commerce. 



1959-71. Directory of Florida industries. Florida State 

 Chamber of Commerce, Jacksonville, Biannual Issues. 

 Ward, R. W., and C. Smoleny. 



1973. The market structure of Florida fresh grapefruit 

 packers: An application of Markov Chain analyses. Econ. 

 Res. Dep. 73-1. Fla. Dep. Citrus and Univ. Fla, Gainesville, 

 91 p. 



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