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The effects of competitors on new product launch and market expansion in the hybrid car market

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  • Yizao Liu

    (The Pennsylvania State University)

Abstract

This paper evaluates the effect of competitors on automakers’ new product launch and market expansion decisions in the hybrid car market. Using data from the entire history in US hybrid car market from 2000 to 2014, this paper estimates a Poisson model with endogeneous switching to account for the initial launch and the following expansion decisions. The results indicate that the presence of competing brands’ hybrid vehicle models has a net positive effect on a brand’s initial launch and expansion decisions. This suggests that demand expansion and market learning from competitors’ hybrid model launch and consumer cultivation are very important for this relatively new technology. Further, I find that the impact of competitors varies over time, vehicle origins, and classes.

Suggested Citation

  • Yizao Liu, 2018. "The effects of competitors on new product launch and market expansion in the hybrid car market," Empirical Economics, Springer, vol. 55(4), pages 1849-1868, December.
    • Handle: RePEc:spr:empeco:v:55:y:2018:i:4:d:10.1007_s00181-017-1342-2
    DOI: 10.1007/s00181-017-1342-2
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    References listed on IDEAS

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    Cited by:

    1. Han‐Chung Chou & Shiu‐Wan Hung & Wen‐Min Lu, 2022. "Exploring competition efficiency of automobile brands: An extensional data envelopment analysis‐metafrontier framework," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(1), pages 206-218, January.

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