The Life Cycle of a Competitive Industry
Year: 1994
Type: article
Abstract: Firm numbers first rise, then later fall, as an industry evolves. This nonmonotonicity is explained using a competitive model in which innovation opportunities fuel entry and relative failure to innovate prompts exit; equilibrium time paths for price and quantity also share features of the data. The model is estimated using data from the U.S. automobile tire industry, a particularly dramatic example of the nonmonotonicity in firm numbers.
Source: Journal of Political Economy
DOI: 10.1086/261934
Authors: Boyan Jovanovic, Glenn M. MacDonald
Institutions: New York University, Washington University in St. Louis
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2070936194