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The Survival of New Products

Author

Listed:
  • Asplund, Marcus

    (Department of Economics)

  • Sandin, Rickard

    (Department of Economics)

Abstract

We study the product turnover in an industry and, in particular, the survival of new products. The data set consists of monthly sales of all products sold in the Swedish beer market over the time period of 1989-1995. The death rates of newly introduced products are high - out of 199 products an estimated 25 percent were withdrawn within 18 months and 50 percent within approximately 48 months. We use parametric duration models with time varying covariates to estimate survival functions. Our results show that products with low and decreasing market shares have higher hazard rates. Moreover, the hazard rates are dependent on the characteristics of the producer. Products from firms with a large number of other products, and (to a lesser extent) the largest market shares are more likely to be withdrawn.

Suggested Citation

  • Asplund, Marcus & Sandin, Rickard, 1996. "The Survival of New Products," SSE/EFI Working Paper Series in Economics and Finance 138, Stockholm School of Economics.
    • Handle: RePEc:hhs:hastef:0138
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    References listed on IDEAS

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    Cited by:

    1. Ma, Xingliang & Shi, Guanming, 2010. "GM vs. Non-GM: A Survival Analysis of Hybrid Seed Corn in the US," Staff Paper Series 553, University of Wisconsin, Agricultural and Applied Economics.
    2. Euy-Young Jung & Chulwoo Baek & Jeong-Dong Lee, 2012. "Product survival analysis for the App Store," Marketing Letters, Springer, vol. 23(4), pages 929-941, December.
    3. María Moral & Jordi Jaumandreu, 2007. "Automobile demand, model cycle and age effects," Spanish Economic Review, Springer;Spanish Economic Association, vol. 9(3), pages 193-218, September.
    4. Elizabeth Webster & Paul H. Jensen, 2011. "Do Patents Matter for Commercialization?," Journal of Law and Economics, University of Chicago Press, vol. 54(2), pages 431-453.
    5. R. Monin & M. Suarez Castillo, 2020. "Product switching, market power and distance to core competency," Documents de Travail de l'Insee - INSEE Working Papers g2020-06, Institut National de la Statistique et des Etudes Economiques.
    6. Viotto da Cruz, Jordana, 2018. "Beyond financing: crowdfunding as an informational mechanism," Journal of Business Venturing, Elsevier, vol. 33(3), pages 371-393.
    7. Michael Klein & Fuat Sener, 2023. "Product Innovation, Diffusion and Endogenous Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 48, pages 178-201, April.
    8. Mô José Moral & Jordi Jaumandreu, "undated". "Automobile demand, model cycle and price effects," Studies on the Spanish Economy 64, FEDEA.
    9. Ferreira, João J.M. & Fernandes, Cristina I. & Ferreira, Fernando A.F., 2020. "Wearing failure as a path to innovation," Journal of Business Research, Elsevier, vol. 120(C), pages 195-202.
    10. Michael Klein & Fuat Sener, 2023. "Product Innovation, Diffusion and Endogenous Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 48, pages 178-201, April.
    11. Francisco Requena‐Silvente & James T. Walker, 2009. "The Survival Of Differentiated Products: An Application To The Uk Automobile Market, 1971–2002," Manchester School, University of Manchester, vol. 77(3), pages 288-316, June.
    12. Ani Manakyan Mathers & Bin Wang & Xiaohong (Sara) Wang, 2020. "Shareholder coordination and corporate innovation," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 47(5-6), pages 730-759, May.

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    More about this item

    Keywords

    Product survival; multiproduct firms; duration models; beer market;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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