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First-Mover Advantage and the Speed of Competitive Entry, 1887-1986

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  • Agarwal, Rajshree
  • Gort, Michael

Abstract

This paper examines historical changes in the duration of the interval between the commercial introduction of a new product and the time when entry by later competitors begins. A priori reasons are examined why the duration of this interval in the U.S. economy may either expand or contract. Data for 46 major product innovations, however, show a systematic tendency for the interval identified above to contract over the last century. The average time span was almost 33 years at the turn of the century and has declined to 3.4 years for innovations in 1967-86. Empirical evidence suggests this change resulted largely from a lowering of absolute cost advantages of first movers through easier transfer of knowledge and skills across firms and was also facilitated by the growth of markets. Copyright 2001 by the University of Chicago.

Suggested Citation

  • Agarwal, Rajshree & Gort, Michael, 2001. "First-Mover Advantage and the Speed of Competitive Entry, 1887-1986," Journal of Law and Economics, University of Chicago Press, vol. 44(1), pages 161-177, April.
  • Handle: RePEc:ucp:jlawec:v:44:y:2001:i:1:p:161-77
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    File URL: http://dx.doi.org/10.1086/320279
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    Cited by:

    1. Kim, Jinyoung, 2017. "Racing against Time in Research: A Study of the 1995 U.S. Patent Law Amendment," IZA Discussion Papers 10815, Institute for the Study of Labor (IZA).
    2. Beschorner, Patrick Frank Ernst, 2008. "Do Shorter Product Cycles Induce Patent Thickets?," ZEW Discussion Papers 08-098, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Fernando F. Suarez & Stine Grodal & Aleksios Gotsopoulos, 2015. "Perfect timing? Dominant category, dominant design, and the window of opportunity for firm entry," Strategic Management Journal, Wiley Blackwell, vol. 36(3), pages 437-448, March.
    4. Grafström, Jonas, 2017. "Technological Change and Wage Polarization – The Illiberal Populist Response," Ratio Working Papers 294, The Ratio Institute.
    5. Gonçalo Pacheco-de-Almeida & Ashton Hawk & Bernard Yeung, 2015. "The right speed and its value," Strategic Management Journal, Wiley Blackwell, vol. 36(2), pages 159-176, February.
    6. Luiz Andrade & Catherine Sermet & Sylvain Pichetti, 2016. "Entry time effects and follow-on drug competition," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(1), pages 45-60, January.
    7. Pier Paolo Saviotti, 2012. "R&D and the Firm," Chapters,in: Handbook on the Economics and Theory of the Firm, chapter 29 Edward Elgar Publishing.
    8. Serguey Braguinsky, 2015. "Knowledge diffusion and industry growth: the case of Japan’s early cotton spinning industry," Industrial and Corporate Change, Oxford University Press, vol. 24(4), pages 769-790.
    9. Jackie Krafft & Francesco Quatraro & Pier-Paolo Saviotti, 2008. "Evolution of the knowledge base in knowledge intensive sectors," Working Papers hal-00264261, HAL.
    10. Anne Wyatt & Margaret Abernethy, 2008. "Accounting for Intangible Investments," Australian Accounting Review, CPA Australia, vol. 18(2), pages 95-107, June.
    11. Javier Garcia-Sanchez & Luiz F. Mesquita & Roberto S. Vassolo, 2014. "What doesn't kill you makes you stronger: The evolution of competition and entry-order advantages in economically turbulent contexts," Strategic Management Journal, Wiley Blackwell, vol. 35(13), pages 1972-1992, December.
    12. Luis F. Medrano E., 2012. "Patent Citations, University Inventor Patents, and Survival in the German Laser Source Industry (1960-2005)," Jena Economic Research Papers 2012-009, Friedrich-Schiller-University Jena.
    13. repec:bla:stratm:v:38:y:2017:i:3:p:566-587 is not listed on IDEAS
    14. Gharbi, Sami & Sahut, Jean-Michel & Teulon, Frédéric, 2014. "R&D investments and high-tech firms' stock return volatility," Technological Forecasting and Social Change, Elsevier, vol. 88(C), pages 306-312.
    15. Margherita Corniani, 2012. "Innovation, Imitation and Competitive Value Analysis," Symphonya. Emerging Issues in Management, University of Milano-Bicocca, issue 2 Innovat, pages 37-52.
    16. Magazzini Laura & Fabio Pammolli, 2013. "R&D, Within and Between Patent Competition in the Pharmaceutical Industry," Working Papers 3/2013, IMT Institute for Advanced Studies Lucca, revised Jul 2013.
    17. April M. Franco & MB Sarkar & Rajshree Agarwal & Raj Echambadi, 2009. "Swift and Smart: The Moderating Effects of Technological Capabilities on the Market Pioneering-Firm Survival Relationship," Management Science, INFORMS, vol. 55(11), pages 1842-1860, November.
    18. Ansgar Dorenkamp & Ivo Mossig, 2010. "Economic Policy and its Impact on the Evolution of Clusters and Spatial Systems Exemplified by German TV Programme Production," Chapters,in: Emerging Clusters, chapter 3 Edward Elgar Publishing.

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