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Knowledge and Creative Destruction over the Industry Life Cycle - The Case of the German Automobile Industry

Author

Listed:
  • Uwe Cantner

    () (University of Jena, Faculty of Economics)

  • Kristina Dreßler

    () (University of Jena, Faculty of Economics)

  • Jens J. Krüger

    () (University of Jena, Faculty of Economics)

Abstract

This paper investigates how the survival of firms over the industry life cycle is affected by different kinds of knowledge, namely post-entry experience, pre-entry experience, and knowledge acquired by innovative activity. Therefore, a statistical survival analysis is performed for the German automobile industry over the period 1886- 1939 which applies a new approach that links instrumental variable estimation with the Cox regression. The main results are that all three knowledge components exert a significantly positive effect on the survival of firms. Furthermore, innovative activity is able to compensate for lacking pre-entry or post-entry experience, completely in accord with Schumpeterian creative destruction.

Suggested Citation

  • Uwe Cantner & Kristina Dreßler & Jens J. Krüger, 2005. "Knowledge and Creative Destruction over the Industry Life Cycle - The Case of the German Automobile Industry," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 05/2005, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
  • Handle: RePEc:jen:jenasw:2005-05
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Kurt Dopfer, 2011. "Mesoeconomics: A Unified Approach to Systems Complexity and Evolution," Chapters,in: Handbook on the Economic Complexity of Technological Change, chapter 13 Edward Elgar Publishing.
    2. Uwe Cantner & Jens Kruger & Kristina von Rhein, 2011. "Knowledge compensation in the German automobile industry," Applied Economics, Taylor & Francis Journals, vol. 43(22), pages 2941-2951.
    3. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, Elsevier.
    4. Markus Pasche, 2005. "(Self-)Regulation of a Natural Monopoly via Complementary Goods - the Case of F/OSS Business Models," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 18/2005, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    5. Simon Renaud, 2006. "Betriebsr�te und Strukturwandel," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 04/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    6. Jens J. Krüger, 2008. "The Sources Of Aggregate Productivity Growth: Us Manufacturing Industries, 1958-1996," Bulletin of Economic Research, Wiley Blackwell, vol. 60(4), pages 405-427, October.
    7. Kristina von Rhein, 2008. "Heritage and Firm Survival - An Analysis of German Automobile Spinoffs 1886-1939," Economics Bulletin, AccessEcon, vol. 12(13), pages 1-8.
    8. Werner Jammernegg & Peter Kischka, 2005. "A Decision Rule Based on the Conditional Value at Risk," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 09/2005, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    9. Uwe Cantner & Jens J. Krüger, 2006. "Micro-Heterogeneity and Aggregate Productivity Development in the German Manufacturing Sector - Results from a Decomposition Exercise," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 02/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    10. Uwe Cantner, 2016. "Foundations of economic change—an extended Schumpeterian approach," Journal of Evolutionary Economics, Springer, vol. 26(4), pages 701-736, October.
    11. Andreas Pyka & Uwe Cantner & Alfred Greiner & Thomas Kuhn (ed.), 2009. "Recent Advances in Neo-Schumpeterian Economics," Books, Edward Elgar Publishing, number 12982, April.
    12. Guido Buenstorf, 2016. "Schumpeterian incumbents and industry evolution," Journal of Evolutionary Economics, Springer, vol. 26(4), pages 823-836, October.
    13. repec:ebl:ecbull:v:12:y:2008:i:13:p:1-8 is not listed on IDEAS
    14. Wolfgang Domschke & Armin Scholl, 2006. "Heuristische Verfahren," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 08/2006, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    15. Andreas Freytag & Donato Masciandaro, 2005. "Financial Supervision Fragmentation and Central Bank Independence: The Two Sides of the Same Coin?," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 14/2005, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
    16. Krüger, Jens J. & von Rhein, Kristina, 2015. "Macroeconomic development and the life cycle of the German automobile industry, 1886-1939," Darmstadt Discussion Papers in Economics 224, Darmstadt University of Technology, Department of Law and Economics.
    17. Krüger, Jens, 2015. "Survival analysis in product life cycle investigations: An assessment of robustness for the German automobile industry," Darmstadt Discussion Papers in Economics 223, Darmstadt University of Technology, Department of Law and Economics.
    18. Markus Pasche, 2005. "Das Vertrauensspiel - eine verhaltensorientierte Erklärung," Jenaer Schriften zur Wirtschaftswissenschaft (Expired!) 19/2005, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.

    More about this item

    Keywords

    firm survival; patents; innovation; automobile industry; hazard rates;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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