IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v30y2009i8p503-511.html
   My bibliography  Save this article

The determinants of industry concentration: two new empirical regularities

Author

Listed:
  • Lasse B. Lien

    (Department of Strategy and Management, Norwegian School of Economics and Business Administration, Bergen, Norway)

  • Nicolai J. Foss

Abstract

This paper reports two new empirical regularities concerning industry concentration. First, concentration levels closely correlate in related industries. Second, the correlation is moderated by the degree of relatedness between the industries. These regularities are derived from the Trinet database, using a survivor-based measure of relatedness. We argue that these previously overlooked relations may be explained in terms of (1) 'spillover effects' between industries and (2) life cycle factors. Copyright © 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Lasse B. Lien & Nicolai J. Foss, 2009. "The determinants of industry concentration: two new empirical regularities," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(8), pages 503-511.
    • Handle: RePEc:wly:mgtdec:v:30:y:2009:i:8:p:503-511
    DOI: 10.1002/mde.1466
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/mde.1466
    File Function: Link to full text; subscription required
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.1466?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. R. E. Caves & M. E. Porter, 1977. "From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 91(2), pages 241-261.
    2. Javier Gimeno, 1999. "Reciprocal threats in multimarket rivalry: staking out ‘spheres of influence’ in the U.S. airline industry," Strategic Management Journal, Wiley Blackwell, vol. 20(2), pages 101-128, February.
    3. Demsetz, Harold, 1973. "Industry Structure, Market Rivalry, and Public Policy," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 1-9, April.
    4. Moshe Farjoun, 1994. "Beyond Industry Boundaries: Human Expertise, Diversification and Resource-Related Industry Groups," Organization Science, INFORMS, vol. 5(2), pages 185-199, May.
    5. Steven Klepper & Elizabeth Graddy, 1990. "The Evolution of New Industries and the Determinants of Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 27-44, Spring.
    6. Sayan Chatterjee & Birger Wernerfelt, 1991. "The link between resources and type of diversification: Theory and evidence," Strategic Management Journal, Wiley Blackwell, vol. 12(1), pages 33-48, January.
    7. Richard A. Bettis, 1981. "Performance differences in related and unrelated diversified firms," Strategic Management Journal, Wiley Blackwell, vol. 2(4), pages 379-393, October.
    8. H. Kurt Christensen & Cynthia A. Montgomery, 1981. "Corporate economic performance: Diversification strategy versus market structure," Strategic Management Journal, Wiley Blackwell, vol. 2(4), pages 327-343, October.
    9. Richard P. Rumelt, 1982. "Diversification strategy and profitability," Strategic Management Journal, Wiley Blackwell, vol. 3(4), pages 359-369, October.
    10. Baldwin,John R. & Gorecki,Paul With contributions by-Name:Caves,Richard E. With contributions by-Name:Dunne,Tim With contributions by-Name:Haltiwanger,John, 1998. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521633574.
    11. Aneel Karnani & Birger Wernerfelt, 1985. "Multiple point competition," Strategic Management Journal, Wiley Blackwell, vol. 6(1), pages 87-96, January.
    12. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1989. "The Growth and Failure of U. S. Manufacturing Plants," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(4), pages 671-698.
    13. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
    14. Teece, David J., 1980. "Economies of scope and the scope of the enterprise," Journal of Economic Behavior & Organization, Elsevier, vol. 1(3), pages 223-247, September.
    15. Corwin D. Edwards, 1955. "Conglomerate Bigness as a Source of Power," NBER Chapters, in: Business Concentration and Price Policy, pages 331-359, National Bureau of Economic Research, Inc.
    16. Montgomery, Cynthia A. & Hariharan, S., 1991. "Diversified expansion by large established firms," Journal of Economic Behavior & Organization, Elsevier, vol. 15(1), pages 71-89, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lasse B. Lien & Peter G. Klein, 2013. "Can the Survivor Principle Survive Diversification?," Organization Science, INFORMS, vol. 24(5), pages 1478-1494, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lasse B. Lien & Peter G. Klein, 2013. "Can the Survivor Principle Survive Diversification?," Organization Science, INFORMS, vol. 24(5), pages 1478-1494, October.
    2. Ron Adner & Peter Zemsky, 2016. "Diversification and Performance: Linking Relatedness, Market Structure, and the Decision to Diversify," Strategy Science, INFORMS, vol. 1(1), pages 32-55, March.
    3. Cynthia A. Montgomery, 1994. "Corporate Diversificaton," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 163-178, Summer.
    4. Chen, Chiung-Jung & Yu, Chwo-Ming Joseph, 2012. "Managerial ownership, diversification, and firm performance: Evidence from an emerging market," International Business Review, Elsevier, vol. 21(3), pages 518-534.
    5. Sorrentino, Mario & Williams, Mary L., 1995. "Relatedness and corporate venturing: Does it really matter?," Journal of Business Venturing, Elsevier, vol. 10(1), pages 59-73, January.
    6. Ding, John Y. & Caswell, Julie A. & Zhou, Furen, 1997. "Relatedness And Performance: A Reexamination Of The Diversification-Performance Link," Journal of Food Distribution Research, Food Distribution Research Society, vol. 28(1), pages 1-8, February.
    7. Thorbjørn Knudsen & Daniel A. Levinthal & Sidney G. Winter, 2014. "Hidden but in plain sight: The role of scale adjustment in industry dynamics," Strategic Management Journal, Wiley Blackwell, vol. 35(11), pages 1569-1584, November.
    8. Alex Coad & Christina Guenther, 2013. "Diversification patterns and survival as firms mature," Small Business Economics, Springer, vol. 41(3), pages 633-649, October.
    9. Dong-Sung Cho & Dong-Hyun Lee, 1998. "A Proposed Industrial Classification System Based on Core Competences," Industry and Innovation, Taylor & Francis Journals, vol. 5(2), pages 197-208.
    10. Werner Hölzl, 2002. "Exit, Entry and industry turbulence in Austrian Manufacturing, 1981-1994," Working Papers geewp21, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
    11. Brian S. Silverman, 1999. "Technological Resources and the Direction of Corporate Diversification: Toward an Integration of the Resource-Based View and Transaction Cost Economics," Management Science, INFORMS, vol. 45(8), pages 1109-1124, August.
    12. Davide Vannoni, 2000. "Diversification, the Resource View and Productivity: Evidence from Italian Manufacturing Firms," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 27(1), pages 47-63, March.
    13. Bernardo Batiz-Lazo & Douglas Wood, 2002. "Strategy, Competition And Diversification In European And Mexican Banking," Industrial Organization 0211013, University Library of Munich, Germany.
    14. Guerras-Martín, Luis Ángel & Ronda-Pupo, Guillermo Armando & Zúñiga-Vicente, José Ángel & Benito-Osorio, Diana, 2020. "Half a century of research on corporate diversification: A new comprehensive framework," Journal of Business Research, Elsevier, vol. 114(C), pages 124-141.
    15. Fang, Yulin & Wade, Michael & Delios, Andrew & Beamish, Paul W., 2013. "An exploration of multinational enterprise knowledge resources and foreign subsidiary performance," Journal of World Business, Elsevier, vol. 48(1), pages 30-38.
    16. Audretsch, David B., 1995. "Innovation, growth and survival," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 441-457, December.
    17. Joon Mahn Lee & Rahul Kapoor, 2017. "Complementarities and Coordination: Implications for Governance Mode and Performance of Multiproduct Firms," Organization Science, INFORMS, vol. 28(5), pages 931-946, October.
    18. Mulligan, Robert F., 2004. "Fractal analysis of highly volatile markets: an application to technology equities," The Quarterly Review of Economics and Finance, Elsevier, vol. 44(1), pages 155-179, February.
    19. Jonathan R. Clark & Robert S. Huckman, 2012. "Broadening Focus: Spillovers, Complementarities, and Specialization in the Hospital Industry," Management Science, INFORMS, vol. 58(4), pages 708-722, April.
    20. Sara Parker‐Lue & Marvin Lieberman, 2020. "The impact of diversification on task performance: Evidence from kidney transplant centers," Strategic Management Journal, Wiley Blackwell, vol. 41(7), pages 1169-1190, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:30:y:2009:i:8:p:503-511. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.