The PC Industry: New Economy or Early Life-Cycle?
AbstractThe paper studies the co-evolution of industrial turbulence and financial volatility in the early phase of the life-cycle of an old high-tech industry and a new high-tech industry: the U.S. auto industry from 1899-1929 and the U.S. PC industry from 1974-2000. In both industries, the first three decades were characterized by industrial turbulence: radical technological change, high entry and exit rates, and rapidly falling prices. However, unlike in the auto industry, in the PC industry technological change and new entry did not lead to strong instability of market shares-at the core of the monopoly-destroying effect of Schumpeterian creative destruction-until the 1990s, when the lead of the incumbents from the pre-existing mainframe and minicomputer industries was undermined. In both industries, stock prices were the most volatile and idiosyncratic during those years in which technological change disrupted market shares the most (Autos: 1918-1928; PCs: 1990-2000).
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Bibliographic InfoArticle provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.
Volume (Year): 5 (2002)
Issue (Month): 2 (April)
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Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
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