Abstract
Based on the theory of diffusion, dynamic market environment is incorporated in the classical Bass diffusion model. The model which assumes that dynamic market environment variables simultaneously influenced the product diffusion at different level is proposed to examine the impact of dynamic market environment on product diffusion. The results of China mini passenger vehicle in recent 11 years indicate that the market environment acts an important role in product diffusion．Meanwhile，the empirical results also validate the effectiveness of incorporating dynamic market environment variables in diffusion model．
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