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Market Share Dynamics and the ‘Persistence of Leadership’ Debate

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  • John Sutton

Abstract

This paper introduces a novel analysis of the classic "persistence of leadership" question, and applies it to a newly constructed dataset for Japanese manufacturing. The analysis rests on an appeal to an empirical "scaling relationship" between current market share and the variance of changes in market share. This relationship provides a powerful "model selection criterion" for candidate models of market share dynamics. It also makes it feasible, even in small datasets, to test directly for the properties of the "first passage times" corresponding to loss of leadership.

Suggested Citation

  • John Sutton, 2004. "Market Share Dynamics and the ‘Persistence of Leadership’ Debate," STICERD - Economics of Industry Papers 37, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  • Handle: RePEc:cep:stieip:37
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    File URL: http://sticerd.lse.ac.uk/dps/ei/ei37.pdf
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    References listed on IDEAS

    as
    1. Mueller,Dennis C., 2009. "Profits in the Long Run," Cambridge Books, Cambridge University Press, number 9780521101592, December.
    2. John Sutton, 1980. "A Model of Stochastic Equilibrium in a Quasi-Competitive Industry," Review of Economic Studies, Oxford University Press, vol. 47(4), pages 705-722.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    market share; industry dynamics; scaling; Japanese economy;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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