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Market share dynamics and the 'persistence of leadership' debate

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  • Sutton, John

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

  • Sutton, John, 2004. "Market share dynamics and the 'persistence of leadership' debate," LSE Research Online Documents on Economics 2062, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:2062
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    File URL: http://eprints.lse.ac.uk/2062/
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    References listed on IDEAS

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    1. Mueller,Dennis C., 2009. "Profits in the Long Run," Cambridge Books, Cambridge University Press, number 9780521101592, November.
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    Cited by:

    1. Felicitas Nowak-Lehmann D. & Dierk Herzer & Sebastian Vollmer & Inmaculada Martínez-Zarzoso, 2006. "Chile´s Market Share in the EU Market: The Role of Price Competition in a Panel Analysis Setting," Ibero America Institute for Econ. Research (IAI) Discussion Papers 139, Ibero-America Institute for Economic Research.
    2. Felicitas Nowak-Lehmann D. & Dierk Herzer & Sebastian Vollmer & Inmaculada Martínez-Zarzoso, 2006. "Problems in Applying Dynamic Panel Data Models: Theoretical and Empirical Findings," Ibero America Institute for Econ. Research (IAI) Discussion Papers 140, Ibero-America Institute for Economic Research.

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    More about this item

    Keywords

    market share; industry dynamics; scaling; Japanese economy;
    All these keywords.

    JEL classification:

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

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