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Small firm subsistence and market dimensionality

Author

Listed:
  • Jeroen Bruggeman

    (Department of Sociology, University of Amsterdam, Amsterdam, Netherlands)

  • Gábor Péli

    (School of Economics, Utrecht University, Utrecht, Netherlands;
    Antwerp Centre of Evolutionary Demography (ACED), University of Antwerp, Antwerp, Belgium)

Abstract

In many markets, large and small firms coexist. As large firms can in principle out-compete small ones, the actual presence of the latter asks for an explanation. In ours, we focus on the dimensionality of markets, which can change as a consequence of product innovations, preference elaboration or institutions. We show that increasing market dimensionality substantially enlarges the market periphery relative to the market center, which creates new potential niches for small firms. We thereby provide a parsimonious explanation for small firm subsistence.

Suggested Citation

  • Jeroen Bruggeman & Gábor Péli, 2014. "Small firm subsistence and market dimensionality," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 25(10), pages 1-11.
    • Handle: RePEc:wsi:ijmpcx:v:25:y:2014:i:10:n:s0129183114500533
    DOI: 10.1142/S0129183114500533
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    Cited by:

    1. César García-Díaz & Gábor Péli & Arjen van Witteloostuijn, 2020. "The coevolution of the firm and the product attribute space," PLOS ONE, Public Library of Science, vol. 15(6), pages 1-25, June.

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