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The Making of an Oligopoly: Firm Survival and Technological Change in the Evolution of the U.S. Tire Industry

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Author Info
Steven Klepper
Kenneth L. Simons

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Abstract

The number of producers in the U.S. tire industry grew for 25 years and then declined sharply, and the industry evolved to be an oligopoly. The role of technological change in shaping the industry's market structure is explored. A model of industry evolution featuring technological change is used to derive predictions that are tested using a novel data set on firm entry, exit, size, location, distribution networks, and technological choices prior to the shakeout of producers. Consistent with the model, earlier-entering and larger firms survived longer, principally because of the influence of age and size on technological change.

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File URL: http://www.journals.uchicago.edu/cgi-bin/resolve?JPE008405PDF
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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 108 (2000)
Issue (Month): 4 (August)
Pages: 728-760
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Handle: RePEc:ucp:jpolec:v:108:y:2000:i:4:p:728-760

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  1. Simons, Kenneth L., 2001. "Information Technology and the Dynamics of Firm and Industrial Structure," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  2. Kenneth L. Simons, 2001. "Information Technology and the Dynamics of Firm and Industrial Structure: The British IT Consulting Industry as a Contemporary Specimen," Royal Holloway, University of London: Discussion Papers in Economics 01/2, Department of Economics, Royal Holloway University of London, revised Aug 2001. [Downloadable!]
  3. Patrick Paul Walsh & Ciara Whelan, 2002. "Product Differentiation and Firm Size Distribution: An Application to Carbonated Soft Drinks," STICERD - Economics of Industry Papers 31, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
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  4. Mihir Desai & Paul Gompers & Josh Lerner, 2003. "Institutions, Capital Constraints and Entrepreneurial Firm Dynamics: Evidence from Europe," NBER Working Papers 10165, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Michael Fritsch & Oliver Falck & Udo Brixy, 2004. "The Effect of Industry, Region and Time on New Business Survival - A Multi-Dimensional Analysis," Papers on Entrepreneurship, Growth and Public Policy 2004-31, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
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  6. Glenn MacDonald & Emin Dinlersoz, 2005. "The Industry Life-Cycle of the Size Distribution of Firms," Working Papers 05-10, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  7. Jackie Krafft, 2006. "Business history and the organization of industry," Post-Print hal-00211780_v1, HAL. [Downloadable!]
  8. Andreas Pyka & Uwe Cantner, 1999. "Informal Networking and Industrial Life Cycles," Discussion Paper Series 181, Universitaet Augsburg, Institute for Economics. [Downloadable!]
  9. Hielke Buddelmeyer & Paul H. Jensen & Elizabeth Webster, 2006. "Innovation and the Determinants of Firm Survival," Melbourne Institute Working Paper Series wp2006n15, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
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  10. Zhu Wang, 2008. "Income Distribution, Market Size and the Evolution of Industry," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(3), pages 542-565, July. [Downloadable!] (restricted)
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  11. Erik Brouwer & Tom Poot & Kees Montfort, 2008. "The Innovation Threshold," De Economist, Springer, vol. 156(1), pages 45-71, March. [Downloadable!] (restricted)
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  12. Agarwal, Rajshree & Bayus, Barry L., 2002. "The Market Evolution and Sales Take-Off of Product Innovations," Working Papers 02-0104, University of Illinois at Urbana-Champaign, College of Business. [Downloadable!]
  13. Jackie Krafft & Marie-Antoinette Maupertuis, 2004. "Innovation et évolution industrielle de long terme," Post-Print hal-00203644_v1, HAL. [Downloadable!]
  14. Ashish Arora & Anand Nandkumar, 2007. "Securing Their Future? Entry And Survival In The Information Security Industry," NBER Working Papers 13634, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Peter Thompson & Mihaela Pintea, 2007. "Sorting, Selection, and Industry Shakeouts," Working Papers 0702, Florida International University, Department of Economics. [Downloadable!]
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  16. Ejermo, Olof & Johansson, Börje, 2004. "Process Innovations in a Duopoly with Two Region," Working Paper Series in Economics and Institutions of Innovation 18, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
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  17. Andrea Bonaccorsi & Paola Giuri, 1999. "Increasing returns and network structure in the evolutionary dynamics of industries," LEM Papers Series 1999/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
  18. William Collier & Francis Green & Young-Bae Kim & John Peirson, 2008. "Education, Training and Economic Performance: Evidence from Establishment Survival Data," Studies in Economics 0822, Department of Economics, University of Kent. [Downloadable!]
  19. Michael S. Dahl & Christian Ø.R. Pedersen & Bent Dalum, 2003. "Entry by Spinoff in a High-tech Cluster," DRUID Working Papers 03-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies. [Downloadable!]
  20. Albert Faber & Koen Frenken, 2008. "Models in evolutionary economics and environmental policy: Towards an evolutionary environmental economics," Innovation Studies Utrecht (ISU) working paper series 08-15, Utrecht University, Department of Innovation Studies, revised Apr 2008. [Downloadable!]
  21. Fumiko Hayashi & Zhu Wang, 2008. "Product innovation and firm survival in a network industry," Research Working Paper RWP 08-14, Federal Reserve Bank of Kansas City. [Downloadable!]
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