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Initial submarket positioning and firm survival: evidence from the British automobile industry, 1895–1970

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  • Zhao Rong

    (Nanjing Audit University)

  • David C. Broadstock

    (Hong Kong Polytechnic University)

  • Yuanyuan Peng

    (Argus Information & Advisory Services, LLC)

Abstract

A firm’s initial choice of its submarket may have a long-lasting influence on its subsequent performance. By examining the duration of firm survival in the British automobile industry between 1895 and 1970, we find that a firm’s initial submarket positioning (defined by the quality level of its first-launched model) influenced its subsequent survival. Additionally, we find that the initial positioning also helped firms to survive a major shakeout, and argue that innovation and path-dependence were two possible channels through which the benefits of initial positioning were felt.

Suggested Citation

  • Zhao Rong & David C. Broadstock & Yuanyuan Peng, 2018. "Initial submarket positioning and firm survival: evidence from the British automobile industry, 1895–1970," Small Business Economics, Springer, vol. 51(4), pages 965-993, December.
    • Handle: RePEc:kap:sbusec:v:51:y:2018:i:4:d:10.1007_s11187-017-9970-7
    DOI: 10.1007/s11187-017-9970-7
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    More about this item

    Keywords

    Firm survival; Product quality; Submarket positioning; Automobile industry; UK;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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