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Market share dynamics and the ‘persistence of leadership’ debate

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  • Sutton, John

Abstract

This paper introduces a novel analysis of the classic “persistence of leadership” question, and applies it to a newly constructed dataset for Japanese manufacturing. The analysis rests on an appeal to an empirical “scaling relationship” between current market share and the variance of changes in market share. This relationship provides a powerful “model selection criterion” for candidate models of market share dynamics. It also makes it feasible, even in small datasets, to test directly for the properties of the “first passage times” corresponding to loss of leadership.

Suggested Citation

  • Sutton, John, 2004. "Market share dynamics and the ‘persistence of leadership’ debate," LSE Research Online Documents on Economics 6731, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:6731
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    File URL: http://eprints.lse.ac.uk/6731/
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    References listed on IDEAS

    as
    1. Mueller,Dennis C., 2009. "Profits in the Long Run," Cambridge Books, Cambridge University Press, number 9780521101592, January.
    2. John Sutton, 1980. "A Model of Stochastic Equilibrium in a Quasi-Competitive Industry," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(4), pages 705-722.
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    More about this item

    Keywords

    market share; industry dynamics; scaling; Japanese economy;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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