The Survival of New Products
AbstractWe study the product turnover in an industry and, in particular, the survival of new products. The data set consists of monthly sales of all products sold in the Swedish beer market over the time period of 1989-1995. The death rates of newly introduced products are high - out of 199 products an estimated 25 percent were withdrawn within 18 months and 50 percent within approximately 48 months. We use parametric duration models with time varying covariates to estimate survival functions. Our results show that products with low and decreasing market shares have higher hazard rates. Moreover, the hazard rates are dependent on the characteristics of the producer. Products from firms with a large number of other products, and (to a lesser extent) the largest market shares are more likely to be withdrawn.
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Bibliographic InfoArticle provided by Springer in its journal Review of Industrial Organization.
Volume (Year): 15 (1999)
Issue (Month): 3 (November)
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Web page: http://www.springerlink.com/link.asp?id=100336
Product survival; multiproduct firms; duration model; beer market;
Other versions of this item:
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
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