An industry typically experiences initial mass entry and later shakeout of producers over its life cycle. However, the timing of the evolution varies substantially across markets. By exploring the dynamic interactions between technology progress and demand diffusion, our theory suggests that the cross-market differences of industrial evolution are largely the result of underlying demand factors. Particularly, higher consumer income or larger market size tends to drive faster demand diffusion and earlier industry shakeout. Empirical studies on the US and UK television industries as well as evidence from twenty other US industries support the theoretical findings. (Copyright: Elsevier)
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Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.
Volume (Year): 11 (2008) Issue (Month): 3 (July) Pages: 542-565 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: D30 - Microeconomics - - Distribution - - - General O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Alessandro Barbarino & Boyan Jovanovic, 2004.
"Shakeouts and Market Crashes,"
NBER Working Papers
10556, National Bureau of Economic Research, Inc.
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Alessandro Barbarino & Boyan Jovanovic, 2007.
"Shakeouts And Market Crashes,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(2), pages 385-420, 05.
[Downloadable!] (restricted)
Hugo A. Hopenhayn, 1993.
"The Shakeout,"
Economics Working Papers
33, Department of Economics and Business, Universitat Pompeu Fabra.
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Grossman, Gene M & Helpman, Elhanan, 1991.
"Endogenous Product Cycles,"
Economic Journal,
Royal Economic Society, vol. 101(408), pages 1214-29, September.
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