Modeling Intercategory and Generational Dynamics for A Growing Information Technology Industry

Namwoon Kim (), Dae Ryun Chang () and Allan D. Shocker ()
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Namwoon Kim: Department of Business Studies, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong
Dae Ryun Chang: School of Management, Yonsei University, Seoul, Korea
Allan D. Shocker: College of Business, San Francisco State University, San Francisco, California 94132

Management Science, 2000, vol. 46, issue 4, 496-512

Abstract: Previous studies dealing with product growth have dealt only with substitution effects among successive generations of one product category and not with complementarity and competition provided by related product categories. Based on a broadened concept of the competitive information technology (IT) market, we develop a dynamic market growth model that is able to incorporate both interproduct category and technological substitution effects simultaneously. The market potential for each category or generation is treated as a variable rather than a constant parameter, which is typical of recently growing IT sectors such as wireless telecommunications. The model is calibrated, its plausibility discussed, and its face and predictive validity assessed using data on wireless telecommunications services from two Asian markets. Results show that the market potential (and sales growth) of one category or generation is significantly affected by others and by the overall structure of a geographic market. The model is shown to make relatively good predictions even when the data from recently introduced categories/generations are limited.

Keywords: information technology; wireless telecommunications service; intercategory effects; market potential; asymmetry of effect; bidirectional interrelationship (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (26)

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