Turbulence in High Growth and Declining Industries
AbstractWe examine turbulence over the product life cycle using the lowest possible level of industry aggregation, allowing for the use of panel data to study the evolution of single product markets. We find that replacement of exiting firms by subsequent entry plays a primary role in generating turbulence in high growth markets, while displacement of incumbents by recent entrants is the main selection force in declining markets. As product life cycles progress, trial-and-error entry subsides, and turbulence decreases.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2007-043.
Date of creation: 31 Jul 2007
Date of revision:
Entry; Exit; Selection; Product life cycle; Replacement; Displacement;
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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-08 (All new papers)
- NEP-COM-2007-08-08 (Industrial Competition)
- NEP-CSE-2007-08-08 (Economics of Strategic Management)
- NEP-ENT-2007-08-08 (Entrepreneurship)
- NEP-TID-2007-08-08 (Technology & Industrial Dynamics)
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