Industry Evolution under Entry Barriers

Jati Sengupta
Additional contact information
Jati Sengupta: University of California

Chapter 5 in Dynamics of Entry and Market Evolution, 2007, pp 118-142 from Palgrave Macmillan

Abstract: Abstract The evolution of industry depends on the selection mechanism, that is the process of entry and exit of firms and the various factors influencing the entry-exit decisions. Two major factors are most important in the selection processes. One is the evolutionary perspective which emphasizes the firm’s ability through strong increasing returns to scale to alter the market structure significantly. Following the Schumpeterian theory of innovations the main source of such increasing returns is the cumulative aspect of such innovations. Secondly, firms differ significantly in their commitment and ability to innovate. Thus innovations in products and processes are largely endogenous to the firm through R&D investment and learning by doing. Thus vigorous innovation has been found to generate more competitive market structures, while innovations requiring large investment generally involve more concentrated market structures. Thus Klepper (1996) and others have shown that innovations could lead to increased concentration if successful innovators rise to market dominance by causing the MES of production to grow more rapidly than demand.

Keywords: Nash Equilibrium; Unstable Manifold; Market Evolution; Positive Real Part; Entry Barrier (search for similar items in EconPapers)
Date: 2007
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-21101-8_5

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230211018

DOI: 10.1057/9780230211018_5

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().