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Competitive Interfirm Dynamics Within An Industrial Market System


  • John Mathews


Scholars concerned with economic processes in industrial economies have long been concerned with the dynamics of firms' adaptation to new circumstances. This article develops a conceptual framework within which industrial dynamics and competitive interfirm interactions can be analyzed in terms of adaptive responses to changes in the complex system of which the firms form part-rather than in terms of anomalies and exceptions, such as the ''market failures'' and ''externalities''favored in mainstream microeconomics. In order to do so, a conceptual framework is introduced, dubbed an Industrial Market System (IMS), in which firms play a central role as actors, and where their resources, routines and relations with each other generate complex structures such as networks, consortia, and development blocks which mediate and shape the strategic responses made by firms. dynamism of the ''new economy'' and the startup firms it generates. There have also been parallel developments such as the rising importance of corporate spinoffs (as counter-trend to mergers and acquisitions) whereby firms seek greater focus and entrepreneurial initiative through divesting parts of their operations as viable businesses.

Suggested Citation

  • John Mathews, 2001. "Competitive Interfirm Dynamics Within An Industrial Market System," Industry and Innovation, Taylor & Francis Journals, vol. 8(1), pages 79-107.
  • Handle: RePEc:taf:indinn:v:8:y:2001:i:1:p:79-107
    DOI: 10.1080/13662710120034419

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    References listed on IDEAS

    1. George B. Richardson, 1996. "Competition, Innovation and Increasing Returns," DRUID Working Papers 96-10, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
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    Cited by:

    1. Andreas Pyka & Bernd Ebersberger & Horst Hanusch, 2004. "A Conceptual Framework to Model Long-run Qualitative Change in the Energy System," Chapters,in: Evolution and Economic Complexity, chapter 9 Edward Elgar Publishing.

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