Explaining the Shakeout Process
A ‘Successive Submarkets’ Model
Bibliographic Data
| ID | 9709637 |
|---|---|
| Authors | Jian Tong (0000-0001-9367-4853, University of Southampton, corresponding author) |
| Year | 2009 |
| Volume | 119 |
| Issue | 537 |
| Pages | 950-975 |
| Publication date | 2009-04-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2009.02252.x |
| OpenAlex | W2023508315 |
| Language | EN |
| Citations received | 1 |
| References cited | 16 |
This article explains contemporaneous exit and entry in a new industry with a diffusion process across submarkets. It allows a re-interpretation of the shakeout process in some industries in a novel way. The industry is a collection of initially inactive independent submarkets; the timing of their activation is determined by an exogenous aggregate diffusion process. New submarket opening attracts new entry. However, the post-entry endogenous sunk investment requirement induced by innovations also forces much exit to follow entry. The aggregate market thus has overlapping exit and entry; and has a shakeout if the aggregate diffusion process follows a typical S-shape. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009
Economics · Process (computing · Volume (thermodynamics · Computer Science · Corporate Finance and Governance · Firm Innovation and Growth · Global trade and economics · History
What do we know about entry?
Hybrid Corn
Patterns of Firm Entry and Exit in U.S. Manufacturing Industries
Selection and the Evolution of Industry
The Economics of Imperfect Competition
The Evolution of Markets and Entry, Exit and Survival of Firms
The Life Cycle of a Competitive Industry
Time Paths in the Diffusion of Product Innovations
The U.S. Tire Industry
| Unique citing works | 1 |
|---|---|
| Citations per year | 0,1 |
| Citation span | 2016 - 2016 (1) |
| Citation velocity | historical |
| Highly cited | No |
| Citation types | Neutral: 1 |