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Dr. Chen:Dr. Chih-Kai Chen is Associate Professor of National Taipei University of Education, Taiwan, China. He holds a PhD degree in international business from National Taiwan University. His works have been published in various SSCI journals such as Journal of Economics. Dr. Chens areas of expertise include entertainment economy, and knowledge-based economy. 陈智凯博士现任国立台北教育大学任助理教授， 拥有国立台湾大学国际贸易博士学位，以及在社会科学引文索引发表多部论文，包括经济学杂志。陈博士的专长领域包括娱乐经济和知识经济Application of Multidimensional Scaling on Culture Industry文化产业中的多维排列法应用 AbstractResearch on culture industry has increased noticeably in recent years. However, while some works are available on qualitative analysis, little information is available on quantitative analysis. Thus, this work used the multidimensional scaling to consider the characteristics of culture industry structure. Overall, the results showed that the industry structure closely related to the industry strength, and that the geography concentration closely related to the vertical disintegration. If focus on the explained variance of the core competitiveness of culture industry and use the agent variable of the added value and the export contribution, the average capital is over the other industry structure variables. Thus, this work suggests that the culture industry should move towards the high structure industry. In detail, enhance the average capital scale, and improve the industry cluster and the vertical disintegration. Moreover, learning the successful business model of multinational enterprises may help improve the global competitiveness of culture industry.Keywords: Culture Industry, Industry Structure, Multidimensional Scaling 1. IntroductionIn knowledge-based economy time, the culture represents the unique style in humanity art and life experience of various countries. However, how to extract new creativities from various cultures and further apply to product innovation will help every country improve the quality of life, employment opportunity, and economic development. World Banks report (1998) noted that culture may provide every country with potential economic opportunity, and that new type and concept of culture economy will arise continuously in future. Thus, in 1997, the United Kingdom first proposed the creative industry economy and improved successfully industry production and employment. Afterward, many countries increasingly imitated to propose their respective culture industry policy. In 2002, Taiwan proposed the “Challenges 2008: the Development Plan” comprising the culture industry and expected that this plan will help improve the industrial added value and the industry reform, that is, this plan further announced the forthcoming culture industry economy in Taiwan.However, research on culture industry has increased noticeably in recent years. But while some works are available on qualitative analysis, little information is available on quantitative analysis. Moreover, the identical definition and category of culture industry are not available across various countries. Thus, how to clearly define the definition of culture industry and identify the common characteristics and the differences and the relation between other industries may help the development of culture industry. Furthermore, little work is available on the culture industry structure, thus this work used the multidimensional scaling (MDS) to consider the culture industry structure, and finally to propose some tactical thinking and management implications and suggestions.2. Theory and hypotheses2.1 Culture industryAdorno and Horkheimer (1974) first proposed the culture industry concept, emphasizing that the mass culture is not created naturally by the mass society and a kind of self-feedback culture; whereas it is a control imposing on people by the governing class and its standardization reduce the individualism. In this time, the culture industry concept emphasizes not industry but culture, and not economy but culture. And then Garnham (1987) defined the culture industry highlighting that adopts the production model and business organization and further create and distribute various signs and symbols by cultural product and service. However, in the course of evolution, this initial contrary concept between economy and culture changes gradually, and the culture is transformed into the creativity for driving economic development. For example, Cave (2000) proposed the creative industry representing the business that produce the product and service embedded with the content of art or creativity. Moreover, Throsby (2001) defined the culture industry that highlights the importance of identifying the scope of culture product. In detail, the culture industry means the products with creativity, and is embodied by the intellectual property, and may communicate with specific symbolic meaning, and reveals the core concept of related creative industry such as music, dance, visual arts, performing arts, and craft. The outer layer is such industries of this core concept as publication, broadcast, television, and movies; and the most outer layer is such industries containing partial culture content as advertisement, architectural design, and sightseeing. Hesmondhalgh (2002) proposed that the major characteristic of the culture industry was to create, produce, and circulate text. Put differently, the culture industry can be divided into the center and the edge. The former includes the advertisement and marketing, mass media, music, publication, and computer games. The latter means the product incapable of mass production. Kunzmann (2003) thought that the regional cognition and tradition will affect the culture industry description across various countries. Put differently, various cognitions on culture industry between different countries are available because of various political society and economy environment.The identical definition and recognition of culture industry are not available across various countries both in the culture context and industry development. However, in 1997, The United Kingdom first proposed the culture industry policy and named the creative industry, and defined this industry based on individual creativity that can enhance more wealth and employment in a particular country by the intellectual property production and utilization (DCMS, 1998). And then other countries like New Zealand, Hong Kong, and Singapore also adopted this definition. Afterward, most countries imitate to propose their respective culture industry policy. For example, Finland highlighted the culture meaning that can further be transformed into various products. Australia proposed the content-driven culture industry showing the characteristic of information communication, and emphasized the content with the intellectual property that can be digital product. As for France highlighted the culture reproduction and focused on the business that can be duplicated massively in the traditional culture business. The United States has not the concrete culture industry concept, and named the culture industry the entertainment industry, that is, the industry based on the long-range market-driven strategy. Canada divided the culture industry into the tangible culture product, the intangible culture service, and the basic concept of copyright. As for the United Nations highlighted the culture content, integrating creativity with commerce production, is essentially intangible asset and protected by the intellectual property, and may be product or service.Overall, the identical term of culture industry is not available across various countries to date; however, the core concept of culture industry is alike, such as the creative industry, the royalty industry, and the entertainment industry. In essence, the convergent definition and the classification of culture industry are available across various countries. Thus, this work reviewed various descriptions and categories of culture industry worldwide as Table 1 and Table 2, and further proposed the integrated definition of culture industry “the business that embodies the culture creativity and innovation.” In detail, the creativity means the diffusible process of imagination and idea production, whereas the innovation means the convergent process of idea selection and practice. Put differently, creativity becomes the precondition of innovation, and then the innovation drives the commercialization of product and service. Thus, the business that embodies these two processes on creativity and innovation, by the production and utilization of intellectual property, can enhance the value creation such as the added value of industry, economic production, and employment opportunity (DCMS, 1998, 2001, 2002; Hill, 2003), and can mean the proposed culture industry.-Insert Table 1 and Table 2 about here -2.2 Industry structureThe industry organization theory indicated that the industry structure analysis is the key to the industrial socioeconomic research. This theory mainly assumes that the industry structure may affect the market behavior and then the economic performance (Masson, 1939; Bain, 1956), that is, the “structure-behavior-performance (SCP) theory. However, this theory incurs many criticisms, for example, some scholars proposed that the industry structure was not a fixed variable and marginally related to other variables, whereas the economic performance and the market behavior will also affect the industry structure (Baumol et al, 1982; Wirth and Bloch 1995). Thus, both the structure school and behavior school are available to date. The former thought that the industry structure is positively related to the economic performance. Put differently, the related variables of industry structure for predicting economic performance are more important than those of the market behavior. Moreover, the identical industry structure may yield various market behaviors; whereas the identical market behavior may also yield various economic performances. Thus, adopting the SCP model may effect biased predictions on economic performance. Furthermore, the latter highlighted that adopting the market behavior variables may eliminate the partial statistic variation and improve the prediction results.However, no mater what kind of the industry organization school, the industry structure always plays an important role in this analysis. In detail, the industry structure focuses on the organization types and competitive relations in industry, the former measures are like the working capital structure, related business scale, the number of total business, geography concentration, industry cluster; The latter measures are like the entry and exit barriers, product differences, market concentration, market growth rate, integration and diversification, and industry value chains (Smirlock 1985; Scherer and Ross 1990; Ferguson and Ferguson 1994; Schepherd and Shepherd 2004). As for the inter-firm competitive relations and market influence, such the sales amount and volume, production, added value and capital are usually adopted. Moreover, in the influence relating the industry structure to the economic performance, Marshall (1920) highlighted the industry regionalization that means the same or related industry clusters, and these clusters can catalyze the emergence of the specialized middle agents and create the spillover effect of information. Stigler (1951) indicated that the industry clusters help the emergence of the specialized middle agents and improve that the manufacturer will to purchase the middle inputs by external supplier in stead of internal production. Put differently, the industry clusters help the industrial vertical disintegration. Similarly, Bain (1956) proposed that a higher industry concentration implies a higher relative profits rate. Moreover, Carlton and Perloff (1994) indicated that the industry concentration degree, product differences, and entry barriers will affect the industry structure. In detail, the industry concentration degree may be divided into the geography distribution, the number and scale distribution of business. The former means the degree of industry cluster that may reduce the market transaction cost and improve transaction effectiveness and the degree of vertical disintegration. However, the industry organization theory has been generally applied to the traditional industry analysis already; applied to the culture industry structure analysis that was still in its infancy. For example, in the culture industry structure description, Cave (2000) proposed that the characteristics of cultural industry include the uncertain demand, team-innovation product, and close short-term industry dependence. Wu Sihua (2004) indicated the characteristics of the culture industry that was based on the excellent disintegration and specialization of production value chains. Moreover, Vogel (2007) proposed that the characteristics of the entertainment industry were as follows: many are called, but few are chosen; marketing expenditures per unit are proportionally large; ancillary markets provide disproportionately large returns; capital costs are relatively high, oligopoly tendencies are prevalent; public-good characteristics are often present. Meanwhile, Vogel proposed that the culture industry structure can be divided into monopoly (e.g., the cable TV, newspapers, and professional sporting), oligopoly (e.g., movies, music, gambling, and theme park), and oligopoly competition (e.g., publication, broadcasting, toy and game, and performing arts).Moreover, Wang Lengyi et al. (2001) proposed that using such strength indicators as marketing, cost controlling, overall innovation, and sustained development may measure the core competitiveness of culture industry structure across various countries. Huajen et al. (2005) indicated that the culture industry develop toward the accelerative scale growth, the transnational capital operation, high industry structure, and high geography cluster, on basis of the production as % of GDP and the employment as % of total labor force of culture industry. Furthermore, Vogel (2007) also proposed that the market concentration degree of culture industry can be measured by the number of business and the relative market share. In the other research, Xue Baoxia et al. (2002) indicated that the key success factors of culture industry in the USA depend on the high industry cluster, abundant human resources, and capital and technology. He Jianfeng (2003) proposed that the publication industry structure can be measured by the average growth rate, sales volume, consumption per person, the number of business, industry concentration, marketability, and internationalization in a particular country. Zhang Guilun (2004) thought that the movies industry is the leading industry of culture industry and can be identified by measuring the horizontal and vertical disintegration degree. Overall, this work integrated these related measured indicators on culture industry structure shown as Table 3.In general, the cluster analysis was usually applied to the industry structure research. In detail, according to the related variable statistics, this analysis measures the similarity between various individuals or observations and then classifies into the same cluster based on high similarity. Put differently, a high similarity within the same cluster is available, and the heterogeneity between the different clusters is available. Finally, the derived cluster was named the strategic groups. In contrast, the MDS analysis was seldom used and that mainly transforms the similarity between various individuals or the observations into multidimensional cognitive configuration. The spot in the configuration represents an observation, and the distances between different spots represent the similarity between various observations. Put differently, a closer distance implies a higher similarity, whereas a farther distance implies a lower similarity. Moreover, the MDS analysis helps simplify and visualize the statistics when many measured variables are available, and this method may show the similarity between various variables by a low-dimensional configuration (Hair et al, 1998)-Insert Table 3 about here -3. Methods3.1 MaterialsThis work used eleven segments of culture industries in Taiwan as the object, including eight segments of visual arts, music and performing arts, craft arts and design, movies, publication, architecture, advertisement, interactive leisure software that were in line with the categories of the UN; five segments of design, fashion design, broadcasting, cultural exhibition facilities, and creative life that were based on the categories of Taiwan. Overall, the adopted object segments were eleven because the fashion design and the creativity life both were deleted owing to the incomplete statistics. Moreover, this work named the architecture and interactive leisure software based on the UN categories the architecture design and digital leisure entertainment. Finally, this work used the 2007 Taiwan cultural and creative industry development annual report and the “2006 the human resources survey statistics” datasets published by Taiwan. As for the measures of this work were as follows: 3.2 MeasuresAs noted above, this work used three dimensions with twelve indicators to measure the culture industry structure, including the organization structure (e.g., the employment rate, the average capital, and the operation rate of multinational enterprise “MNE”), the competition structure (e.g., the geography concentration, the market concentration, the vertical disintegration, the contr