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Product innovation and persistence of leadership: theory with evidence from the semiconductor industry

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  • Gruber, Harald

Abstract

This paper sets out to model the evolution of market shares in the semiconductor industry. The time profile of market shares for different firms in this industry has shown a striking regularity over successive generations of products. In a model of vertical product differentiation three distinct patterns of market shares emerge as an equilibrium outcome, reflecting three distinct strategies in respect of timing of entry into new generations. The main novelty of the model developed here, relative to the existing literature on vertical product differentiation, lies in the incorporation of 'learning by doing'.

Suggested Citation

  • Gruber, Harald, 1990. "Product innovation and persistence of leadership: theory with evidence from the semiconductor industry," LSE Research Online Documents on Economics 6783, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:6783
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    File URL: http://eprints.lse.ac.uk/6783/
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    Cited by:

    1. Roper, Stephen & Hewitt-Dundas, Nola, 2008. "Innovation persistence: Survey and case-study evidence," Research Policy, Elsevier, vol. 37(1), pages 149-162, February.
    2. John Sutton, 2001. "Rich Trades, Scarce Capabilities: Industrial Development Revisited," STICERD - Economics of Industry Papers 28, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.

    More about this item

    Keywords

    Vertical product differentiation; semiconductor industry; 'learning by doing'; market shares; time profile.;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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