Understanding evolutionary processes in non-manufacturing industries: Empirical insights from the shakeout in pharmaceutical wholesaling

Adam Fein ()

Journal of Evolutionary Economics, 1998, vol. 8, issue 3, 270 pages

Abstract: Although the empirical pattern of industry shakeout has been documented for many manufacturing industries, we know little about the processes by which market structure evolves in non-manufacturing service industries. This paper establishes detailed empirical observations about the consolidation of a single non-manufacturing industry, the wholesale distribution of pharmaceuticals. These observations are used to explore differences between manufacturing and wholesaling in both the patterns and explanations for consolidation and analyze the explanatory power of theories that link consolidation to technological change. The analysis demonstrates that theories developed to explain consolidation in new manufacturing industries have varying degrees of applicability to the consolidation of drug wholesaling. The observed patterns of exit, innovation, and growth suggest important modifications to evolutionary theories of market structure.

Keywords: Production and market structure; Size distribution of firms; Technological change: choices and consequences; Retail and wholesale trade; Marketing (search for similar items in EconPapers)
JEL-codes: L11 L81 M31 O33 (search for similar items in EconPapers)
Date: 1998-09-02
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Citations: View citations in EconPapers (18)

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