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Determinants of new product introductions in the US food industry: a panel-model approach

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  • Claudia Roder
  • Roland Herrmann
  • John Connor

Abstract

Economic theory suggests that market structure variables influence technical change, growth and new product introductions. Based on a broad data set for new product introductions in various food industries, it is elaborated in this article how market structure variables affect innovative activities in the US food sector. It is different from earlier studies in the way that cross-sectional and time-series data are combined and panel data models are used in the econometric analysis. A major result is that new product introductions are driven by market structure variables and industry-specific characteristics, i.e. fixed effects. A significant determinant of new food product introductions is the concentration ratio which affects the number of innovations in a nonlinear form. The fixed-effects estimates reveal a U-type effect of concentration on innovations. Furthermore, the number of firms, the degree of existing product differentiation and the size of a market show a positive influence on the number of innovations. From a methodological point of view, plain OLS models yield biased results on the concentration-innovation linkage and on the relationship between the size of a market and innovations. Therefore, it is very important to include sector-specific characteristics as is done in the fixed-effects models.

Suggested Citation

  • Claudia Roder & Roland Herrmann & John Connor, 2000. "Determinants of new product introductions in the US food industry: a panel-model approach," Applied Economics Letters, Taylor & Francis Journals, vol. 7(11), pages 743-748.
  • Handle: RePEc:taf:apeclt:v:7:y:2000:i:11:p:743-748
    DOI: 10.1080/135048500421395
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    Citations

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    Cited by:

    1. Torben Schubert, 2010. "Marketing and Organisational Innovations in Entrepreneurial Innovation Processes and their Relation to Market Structure and Firm Characteristics," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 36(2), pages 189-212, March.
    2. Haimanti Bhattacharya & Robert Innes, 2016. "Concentration, Product Variety, and Entry-for-Merger: Evidence from New Product Introductions in the U.S. Food Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(5), pages 1360-1376.
    3. Hartl, Jochen & Herrmann, Roland, 2006. "The Role of Business Expectations for New Product Introductions: A Panel Analysis for the German Food Industry," Journal of Food Distribution Research, Food Distribution Research Society, vol. 37(02), July.
    4. Kubitzki, Sabine & Anders, Sven M., 2005. "Branchenspezifische Besonderheiten im Innovationsverhalten des Ernährungsgewerbes: Eine empirische Analyse des Mannheimer Innovationspanels," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 54(2).
    5. W. Bruce Traill & Matthew Meulenberg, 2001. "Innovation in the food industry," Agribusiness, John Wiley & Sons, Ltd., vol. 18(1), pages 1-21.
    6. Wittkopp, Antje, 2002. "Marktstruktur, Innovationsaktivität und Profitabilität der deutschen Ernährungswirtschaft: Das Beispiel Functional Food," FE Working Papers 0205, Christian-Albrechts-University of Kiel, Department of Food Economics and Consumption Studies.
    7. Theofanis Papageorgiou & Panayotis G. Michaelides & John G. Milios, 2011. "Technology and economic fluctuations in the US food sector (1958-2006): An empirical approach from a political economy perspective," International Journal of Social Economics, Emerald Group Publishing, vol. 38(2), pages 140-164, January.
    8. Weiss, Christoph R. & Wittkopp, Antje, 2003. "Buyer Power and Innovation of Quality Products: Empirical Evidence from the German Food Sector," FE Working Papers 0307, Christian-Albrechts-University of Kiel, Department of Food Economics and Consumption Studies.
    9. Innes, Robert, 2008. "Entry for merger with flexible manufacturing: Implications for competition policy," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 266-287, January.
    10. Papageorgiou, Theofanis & Michaelides, Panayotis G. & Milios, John, 2009. "Economic Fluctuations, Cyclical Regularities and Technological Change: The U.S. Food Sector (1958–2006)," MPRA Paper 67115, University Library of Munich, Germany.
    11. McNamara, Kevin T. & Weiss, Christoph R. & Wittkopp, Antje, 2003. "Market Success of Premium Product Innovation: Empirical Evidence from the German Food Sector," FE Working Papers 0306, Christian-Albrechts-University of Kiel, Department of Food Economics and Consumption Studies.
    12. Herrmann, Roland & Schröck, Rebecca, 2011. "Determinanten des Innovationserfolgs: eine Analyse mit Scannerdaten für den deutschen Joghurtmarkt," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 60(3).
    13. Karantininis, Kostas & Sauer, Johannes & Furtan, William Hartley, 2010. "Innovation and integration in the agri-food industry," Food Policy, Elsevier, vol. 35(2), pages 112-120, April.

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