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The Nature and Effects of Technological Change over the Industry Life Cycle

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  • Darren Filson

    (Claremont Graduate University)

Abstract

This paper estimates quality and cost innovations in the early automobile, personal computer, rigid disk drive, computer monitor, and computer printer industries using industry-level data on firm numbers, price, quantity, and quality and an equilibrium model of industry evolution. The results challenge the notion that new industries experience quality innovation early on and cost innovation later on. In the microelectronics industries the rate of quality improvement does not diminish over time. In the automobile industry, even though the rate of quality improvement is highest early on, the profitability of quality advantages is highest later on. (Copyright: Elsevier)

Suggested Citation

  • Darren Filson, 2001. "The Nature and Effects of Technological Change over the Industry Life Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(2), pages 460-494, July.
    • Handle: RePEc:red:issued:v:4:y:2001:i:2:p:460-494
    DOI: 10.1006/redy.2000.0120
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    References listed on IDEAS

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    Cited by:

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    2. Russell, Bonita I. & Shapiro, Daniel & Vining, Aidan R., 2010. "The evolution of the Canadian mining industry: The role of regulatory punctuation," Resources Policy, Elsevier, vol. 35(2), pages 90-97, June.
    3. Reuber, A. Rebecca & Fischer, Eileen, 2007. "Don't rest on your laurels: Reputational change and young technology-based ventures," Journal of Business Venturing, Elsevier, vol. 22(3), pages 363-387, May.
    4. Natália Barbosa & Ana Paula Faria & Vasco Eiriz, 2014. "Industry- and firm-specific factors of innovation novelty," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 23(3), pages 865-902.
    5. Mariana Mazzucato, 2002. "The PC Industry: New Economy or Early Life-Cycle?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 318-345, April.
    6. Arghya Ghosh & Takao Kato & Hodaka Morita, 2012. "Continuous improvement and competitive pressure in the presence of discrete innovation," Discussion Papers 2012-17, School of Economics, The University of New South Wales.
    7. Bos, Jaap W.B. & Economidou, Claire & Sanders, Mark W.J.L., 2013. "Innovation over the industry life-cycle: Evidence from EU manufacturing," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 78-91.
    8. Hyunbae Chun & M. Ishaq Nadiri, 2008. "Decomposing Productivity Growth in the U.S. Computer Industry," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 174-180, February.
    9. Souresh Saha, 2007. "Consumer preferences and product and process R&D," RAND Journal of Economics, RAND Corporation, vol. 38(1), pages 250-268, March.
    10. Fumiko Hayashi & Ms. Grace B Li & Zhu Wang, 2015. "Innovation, Deregulation, and the Life Cycle of a Financial Service Industry," IMF Working Papers 2015/192, International Monetary Fund.
    11. Boyan Jovanovic & Zhu Wang, 2020. "Idea Diffusion and Property Rights," Working Paper 20-11, Federal Reserve Bank of Richmond.
    12. Najda-Janoszka, Marta, 2017. "Industry Transition - Challenges for Value Capture," MPRA Paper 81919, University Library of Munich, Germany.
    13. Mariana Mazzucato & Massimiliano Tancioni, 2005. "Innovation and Idiosyncratic Risk," Computing in Economics and Finance 2005 81, Society for Computational Economics.
    14. Fumiko Hayashi & Bin Grace Li & Zhu Wang, 2017. "Innovation, Deregulation, and the Life Cycle of a Financial Service Industry," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 26, pages 180-203, October.
    15. Bent Dalum & Christian Ø.R. Pedersen & Gert Villumsen, 2002. "Technoligical Life Cycles Regional Clusters Facing Disruption," DRUID Working Papers 02-10, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    16. Filson, Darren, 2002. "Product and process innovations in the life cycle of an industry," Journal of Economic Behavior & Organization, Elsevier, vol. 49(1), pages 97-112, September.
    17. Schmoch, Ulrich, 2007. "Double-boom cycles and the comeback of science-push and market-pull," Research Policy, Elsevier, vol. 36(7), pages 1000-1015, September.
    18. OHYAMA Atsushi, 2017. "Industry Growth through Spinoffs and Startups," Discussion papers 17057, Research Institute of Economy, Trade and Industry (RIETI).
    19. Saha, Souresh, 2014. "Firm's objective function and product and process R&D," Economic Modelling, Elsevier, vol. 36(C), pages 484-494.
    20. Basole, Rahul C. & Park, Hyunwoo & Barnett, Brandon C., 2015. "Coopetition and convergence in the ICT ecosystem," Telecommunications Policy, Elsevier, vol. 39(7), pages 537-552.
    21. Marta, Najda-Janoszka & Jacek, Gancarczyk, 2018. "Addressing the Challenges of Industrial Transition Processes – the Case of Photovoltaics Industry," MPRA Paper 93538, University Library of Munich, Germany.
    22. Mariana Mazzucato, 2006. "Innovation and Stock Prices: a Review of some Recent Work," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 159-179.
    23. Filson, Darren & Gretz, Richard T., 2004. "Strategic innovation and technology adoption in an evolving industry," Journal of Monetary Economics, Elsevier, vol. 51(1), pages 89-121, January.

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    More about this item

    Keywords

    shakeout; product and process innovation; technological change; industry dynamics; technology;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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