Evolution Of Industrial Structure Research Articles

European Integration and the Changing Structure of EU Manufacturing, 1987-1993

This paper reports the results from a project designed to track the evolution of industrial and corporate structure of EU manufacturing alongside the ongoing European integration process. At the heart of the work is the construction of an ‘EU market share matrix’ for 1993. This includes estimates of the turnovers of a set of 300 leading manufacturing firms, disaggregated across nearly 100 industries and then, in turn, across the individual member states. This allows us to estimate the extent of diversification and intra‐EU multinationality for each of the firms, and the concentration of producers and measures of geographical concentration for each of the industries. When coupled with a similar matrix for 1987, this provides a rich and detailed mapping of how these structural dimensions have changed with the final stage (so far as the legislation is concerned) of the European single market programme. Our main ‘headline’ findings are that, on average, (i) concentration has remained stable; (ii) multi‐nationality has increased rapidly—both the intra‐EU multinationality of European firms and the inward multinationality of non‐EU firms; and (iii) diversification has decreased slightly.

A contribution to the evolutionary theory of innovation, imitation and growth

This paper develops mathematically tractable evolutionary models that can be used to analyze the development of industrial structure as a dynamic process moved by complex interactions among innovations, imitations and investments of satisficing firms striving for survival and growth. It demonstrates that what the industry will approach in the long-run is not a neoclassical equilibrium of uniform technology but at best a statistical equilibrium of technological disequilibria which maintains a relative dispersion of efficiencies in a statistically balanced form. This paper also shows that these evolutionary models can simulate all the macroscopic characteristics of neoclassical growth models without assuming the full rationality of business behavior.

Industry evolution and competence development: the imperatives of technological convergence

This article examines the growing impact of technological convergence on the evolution of industry structure and the development of core competences, knowledge, and skill sets within firms. Technological convergence occurs when advances or innovations commercialised in one industry begin significantly to influence or change the nature of product development, competition, and value-creating processes in other industries. By promoting the creation of higher value-added substitute or complementary products that redefine an industry's structure, convergence may lead to competitive conditions in which one industry's products or services are increasingly linked, absorbed, or blended with another industry's expanded range of offerings. In turn, convergence leads to the steady erosion of once-distinct boundaries among industries as they begin to share more similar competitive, market-based, and technological characteristics. As industries become closer, firms need to learn and invest in new types of core competences that allow them to deploy value-creating skills and core product platforms, which can be easily reconfigured and adapted to a wider base of customers across different markets. Sustained learning of new core competences requires the cultivation of multiple dynamic routines that foster the creation of new sources of knowledge, insights, and capabilities. Internal R&D and strategic alliances with partners from a range of different industries can promote corporate strategies that enable firms to enact upon converging environments.

Chemicals and long-term economic growth: insights from the chemical industry

ORGANIZATION AND PURPOSE. Introduction (A. Arora, et al.). COUNTRY OVERVIEWS. On the Making of Competitive Advantage: The Development of the Chemical Industries of Britain and Germany Since 1850 (J. Murmann & R. Landau). Chemicals: A U.S. Success Story (A. Arora & N. Rosenberg). The Japanese Puzzle (T. Hikino, et al.). INNOVATION AT THE HEART OF THE INDUSTRY. The Process of Innovation in the Chemical Industry (R. Landau). The Impact of the Legal System on Innovation (T. Campbell & R. Landau). Technological Change in Chemicals: The Role of University-Industry Relations (N. Rosenberg). SURVEYING THE LEVELS OF THE MATRIX. The Industry Evolves Within a Political, Social, and Public Policy Context: A Brief Look at Britain, Germany, Japan, and the United States (M. Horstmeyer). Monetary, Fiscal, and Trade Policies in the Development of the Chemical Industry (B. Eichengreen). Finance and the Chemical Industry (M. Da Rin). Structure and Performance of the Chemical Industry under Regulation (K. Esteghamat). Evolution of Industry Structure in the Chemical Industry (A. Arora & A. Gambardella). The Evolution of Corporate Capability and Corporate Strategy and Structure Within the World's Largest Chemical Firms: The Twentieth Century in Perspective (A. Chandler, et al.). THE MODERN CHEMICAL INDUSTRY AND CORPORATE GOVERNANCE. Connecting Performance and Competitiveness with Finance: A Study of the Chemical Industry (A. Richards). INSIGHTS FROM THIS STUDY. Conclusions (A. Arora, et al.). About the Contributors. Index.

Technological Regimes, Industrial Demography and the Evolution of Industrial Structures

The purpose of this paper is to weave together the new theories and empirical evidence analyzing firms and industries in motion, or what has been termed ‘industrial demographics’. In particular, the links between the technological regime underlying an industry and the observed patterns of industry demography are emphasized. Although a major conclusion of this new literature is that the structure of industries is perhaps better characterized by a high degree of fluidity and turbulence than stability, the patterns of industry demographics vary considerably from industry to industry. And what apparently shapes the evolution of firms particular to a specific industry is, as much as anything else, the knowledge conditions shaping the technological regime underlying that industry.

Innovation regimes, entry and market structure

This paper contains a description of an evolutionary model of industrial dynamics and a report on the simulation study of the model. The presentation of the model is partitioned into two sections. In the first section I focus on the economic features of industrial development with no technological change imbedded, while an extended version of this model with the search for innovation process included is presented in the next section. In the next two sections, results of the simulation study on technological regimes and firm entry are presented. Technological regimes relate to different types of innovation captured by the model, so I consider the cost regime, the technical performance regime and the capital productivity regime. In Sect. III I investigate the influence of the different types of innovation on the development of the industry, particularly on industry concentration and on the products' price distribution, and in the fourth section an evolution of industry structure with the possibility of firm entry is investigated.

Innovation regimes, entry and market structure

This paper contains a description of an evolutionary model of industrial dynamics and a report on the simulation study of the model. The presentation of the model is partitioned into two sections. In the first section I focus on the economic features of industrial development with no technological change embedded, while an extended version of this model with the search for innovation process included is presented in the next section. In the next two sections, results of the simulation study on technological regimes and firm entry is presented. Technological regimes relate to different types of innovation captured by the model, so I consider the cost regime, the technical performance regime and the capital productivity regime. In section III I investigate the influence of the different types of innovation on the development of the industry, particularly on industry concentration and on the products’ price distribution, and in the fourth section an evolution of industry structure with the possibility of firm entry is investigated.

Learning, market selection and the evolution of industrial structures

Industrial economics is a rich source of ‘puzzles’ for economic theory. One of them — certainly the most discussed — regards the co-existence of firms (and plants) of different sizes, displaying rather invariant skewed distributions. Other ‘puzzles’, however, concern the sectoral specificities in industrial structures, the persistence of asymmetric corporate performances and the dynamics of entry and exit. The paper reports some preliminary results on evolutionary modeling of the links between the microeconomics of innovation, the patterns of industrial change and some observable invariances in industrial structures.

Co–evolution of Industry Structure, Technology and Supporting Institutions, and the Making of Comparative Advantage

In recent years,a considerable body of research has been established on the co–evolution of technology and industry structure, from the time that the technology is young to the time when it is mature· A somewhat smaller body of research has been established on how private and public institutions, and public programs and policies co-evolved with a technology and industry· It is proposed here that nations differ in their pace and pattern of institutional response to the birth and development of an industry, and that the locus of comparative advantage is largely determined by these different kinds of national response.

An analysis of the policy-making in regulating the industrial structure and distribution in traditional industrial base in middle liaoning province

Vigorous development of old industrial bases is one of the decisive strategies accomplishing the industrial modernization in China. From a new viewpoint, the traditional economic-geographical factors such as structure of mine resources, economic and technical base, and natural environment, and new factors such as evolution of industrial structure, the change of macro-regional and-industrial policies, reform of economic system and management and transform of industrial organization are comprehensively studied and analyzed. The conditions to regulate industrial structure and distribution in old industrial bases are evaluated. The program for regulating industrial structure and distribution of old heavy industrial base in middle Liaoning Province including five cities of Shenyang, Anshan, Fushun, Benxi and Liaoyang is put forward, which is accepted by the Territorial Planning of Liaoning Province worked out from 1988 to 1990. With the aid of the analysis of hierarchical process (AHP), the program is examined and evidenced.

<Paper>Innovation of New Products and Evolution of Industrial Structure in an Asymmetyric Oligopoly Market

<Paper>Innovation of New Products and Evolution of Industrial Structure in an Asymmetyric Oligopoly Market

Industrial Reorganization in Europe: Patterns of Convergence and Divergence in Germany, France and Britain

One of the responses to increased uncertainty and heightened competition in the 1980s has been a strategy on the part of large firms to externalise more production and design tasks, leading to what has been termed a new division of labour between firms. In this paper the study of the changing relationship between large buyer companies and predominantly small and medium-sized supplier enterprises (SMEs) is approached in both an historical and a comparative manner. The paper outlines the historical development of industrial structure and organization in Germany, Britain and France and examines the impact of historical formations on current transformations. It places great weight on the way in which firms have been embedded in, and shaped by, their social, institutional and political environment. The interaction of industrial organization with such local or national environments is characterised as an `industrial order'. It is shown how these historically evolved industrial orders have influenced the technological and organizational competences of both large companies and SMEs and how this, in turn, has shaped the relationship between the two types of firm. Variations in industrial order within a society between regions/industries are acknowledged but such diversity is not seen as precluding the elaboration of national patterns. It is argued that, due to fundamental differences in the industrial order between Germany, France and Britain, divergence in current national patterns of industrial reorganization has remained more pronounced than any convergence following the experience of a common exposure to economic and political (from the EEC) pressures. A common experience of a high incidence and fast pace of industrial restructuring should not divert attention from the great degree of continuity and even conservatism within seemingly radical transformations.

Sunk costs and market structure: price competition, advertising, and the evolution of concentration

Sunk Costs and Market Structure bridges the gap between the new generation of game theoretic models that has dominated the industrial organization literature recently and the traditional empirical agenda of the subject as embodied in the structure-conduct-performance paradigm developed by Joe S. Bain and his successors. Because many results turn out to depend on detailed features of the market that are difficult to measure, some observers argue that the game theory literature offers little basis for the kind of cross-industry studies that have formed the empirical base of the subject since the 1950s. Using current game-theoretic methods, John Sutton reexamines the traditional agenda. He argues that despite the delicate nature of many results, there are theoretical predictions that turn out to be extremely robust to reasonable changes in model specification, and these results should be taken into account when looking for statistical regularities across a broad spectrum of different industries. Sutton assembles a matrix of industry studies relating to twenty markets within the food and drink sector, in six countries—France, Germany, Italy, Japan, the United Kingdom, and the United States. He combines theory, econometric evidence, and a detailed account of the various patterns of evolution of structure found in these industries in a rigorous evaluation of the strengths and limitations of a game-theoretic approach in explaining the evolution of industrial structure.

Dynamic Comparative Advantage and the Search for a Coherent Industrial Policy in ASEAN

The linkages between industrial policy and trade policy are explored in this article. The experience of various developed and developing countries is cited, with particular emphasis upon ASEAN. The importance of a trade policy that enables industrial sectors to respond to changing comparative advantages is stressed and proposals are made ensuring better means of identifying the bases of comparative advantages in developing countries, using more homogeneous classes of factor endowments ?not only labour and capital generally, but human capital, physical capital, and informa tion-based endowments which can help to identify the probable evolution of industry structure in developing countries. If the role of industrial policy is to be coherent, it is argued that it should be complementary to trade policy, assisting adjustment and compensating for market failures which impede outward-oriented development strategy.

Strategic groups, asymmetrical mobility barriers and contestability

AbstractThis paper examines the literature on strategic groups and extends it: first, by clarifying the distinction between two alternate approaches to forming groups, emphasizing that multivariate group analysis can be used to conserve information not only summarize it as bivariate grouping does; second, by focusing attention on the importance of asymmetrical mobility barriers and competitive advantage in the process of industry consolidation and concentration; and third, by linking groups and the concept of contestability in an effort to make some progress towards explaining the evolution of industry structure.

Deregulation, Endogenous Expectations and the Evolution of Industry Structure

This analysis of deregulation as a government directed switch of regime from monopoly to competition treats the incumbent producer as a monopolist who anticipates that deregulation will occur at some future date and result in the deployment of substitutes, producing a competitive environment. The results suggest that the ceiling for the rise in world gas prices will fall, capping any domestic price rise. The model indicates that any drop in world prices will be moderated by an incumbent producer (e.g., OPEC) who uses market variables like price to improve his forecast of competitive entry. When the incumbent recognizes that higher monopoly prices raise the probability of entry, the resulting monopoly path of prices will lie closer to the postulated path of initial competitive prices, resulting in a less substantial drop in price when the switch of regime actually occurs. 27 references.

Les structures industrielles des pays de l'OCDE face à la crise

The economie conditions for OECD countries have substantially changed since the 60's. Four main transformations are isolated : price increases of energy, low growth scenarios, competition from the NIC's which however are also new markets, the technological revolution in electronics. The evolution of industrial structures, in various countries, does ref lect their adaptations to those new conditions. While, in many respects, future prospects appear to be very incertain, one dominant orientation seems to corne out : the ability of OECD countries to master the new technologies will be conditioning their capacity to faster industrial growth on a renewed basis.

Advertising and Profitability: A Reappraisal

Previous empirical studies of the relationship between profitability, market structure, and advertising intensity have consistently found a strong positive relationship between profit rates and advertising intensity. The profit rates used in these studies are based on treating advertising expenditures as a current expense. Much evidence exists that advertising has a long-lasting effect on sales, so that the treatment of advertising as a current expense is inappropriate. In this paper, corrected profit rates are calculated by treating advertising expenditures as an investment in a capital asset. The corrected profit rates are then used in a multivariate regression analysis of the relationship between profitability, market structure, and advertising intensity. No significant relationship between corrected profit rates and advertising intensity is found in the regressions. This finding suggests that the positive relationships between uncorrected profit rates and advertising intensity in previous studies are due solely to the inappropriate expensing of advertising.

The Development of Industrial Structure in Southern New England

In a recent study, I prepared gross state product estimates for each of the New England states for the postwar years, 1948-1965.1 The estimates were provided for the one digit major industry groupings and the two digit manufacturing categories. One conclusion, developed from a comparison of postwar growth performance, was that New England performed at a much lower level than the rest of the nation in the advance of aggregate real product. A review of industry movements revealed that New England's relative lag behind the nation was greatest in the manufacturing sector. Examination of the manufacturing growth record indicated that most of the postwar difference in the advance of aggregate real output between New England and the nation arose as the result of structural differences within manufacturing. New England manufacturing was characterized by a very heavy dependence on industries which suffered relative declines in the twentieth century, particularly in the postwar period. Most important of the declining industries were textiles and leather. The relatively high concentration of these industries in New England underscored most of the postwar regional growth difference. A review of statewide postwar growth trends in aggregate real product indicated that of the New England states only Connecticut was able to surpass national economic performance. Connecticuts relatively superior performance was largely due to her advance of real product in the manufacturing sector.2 The two industries on the decline, textiles and leather, were extremely important in the slow-growing New England states, particularly Massachusetts and Rhode Island, and relatively unimportant to the Connecticut economy. On the other hand, Connecticut did show a

Firm Size and Rate of Growth

Firm Size and Rate of Growth