IDEAS home Printed from https://ideas.repec.org/p/cep/stieip/26.html
   My bibliography  Save this paper

Submarkets, Shakeouts and Industry Life-Cycle

Author

Listed:
  • Jian Tong

Abstract

Some recent empirical findings suggest that there are intrinsic links between the statistical regularities regarding cohort survival patterns, the persistence of firm turnover, and shakeout during an industry life-cycle. This paper presents a theoretical model which explains these regularities and the links between them. I begin the analysis by treating the market as comprising a number of strategically independent submarkets, so that I can separate the strategic interaction effect at the submarket level and the independence effects which operate across these independent submarkets at the aggregate level. The analysis reveals that within each submarket a 'selection process' in in quality competition induces market concentration over time, and this leads to a certain shakeout pattern at the disaggregate level. The study also finds that the dynamics of the emergence of submarkets in a conventionally defined industry plays a crucial role in shaping the aggregate pattern of the industry life-cycle.

Suggested Citation

  • Jian Tong, 2000. "Submarkets, Shakeouts and Industry Life-Cycle," STICERD - Economics of Industry Papers 26, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  • Handle: RePEc:cep:stieip:26
    as

    Download full text from publisher

    File URL: http://sticerd.lse.ac.uk/dps/ei/EI26.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Carlson, John A & McAfee, R Preston, 1983. "Discrete Equilibrium Price Dispersion," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 480-493, June.
    2. John Sutton, 1997. "Gibrat's Legacy," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 40-59, March.
    3. Franco Mariuzzo & Patrick Walsh & Ciara Whelan, 2003. "Firm Size and Market Power in Carbonated Soft Drinks," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 23(3), pages 283-299, December.
    4. Luigi Buzzacchi & Tommaso M. Valletti, 2004. "Firm Size Distribution in Small Samples," Bulletin of Economic Research, Wiley Blackwell, vol. 56(4), pages 301-309, October.
    5. Dahlby, Bev & West, Douglas S, 1986. "Price Dispersion in an Automobile Insurance Market," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 418-438, April.
    6. Asplund, Marcus, 1998. "On the size distributions of firms and markets," SSE/EFI Working Paper Series in Economics and Finance 288, Stockholm School of Economics.
    7. Barron, John M. & Taylor, Beck A. & Umbeck, John R., 2004. "Number of sellers, average prices, and price dispersion," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1041-1066, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. John Sutton, 2001. "Rich Trades, Scarce Capabilities: Industrial Development Revisited," STICERD - Economics of Industry Papers 28, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.

    More about this item

    Keywords

    Industry life-cycle; industrial growth; submarkets; shake-outs;

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cep:stieip:26. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://sticerd.lse.ac.uk/_new/publications/default.asp .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.