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http://ssrn.com/abstract=2154554
 
 

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Latent Submarket Dynamics and Industry Evolution: Lessons from the U.S. Laser Industry


Ajay Bhaskarabhatla


Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management

Steven Klepper


Carnegie Mellon University - David A. Tepper School of Business

November 1, 2013

Forthcoming, Industrial and Corporate Change

Abstract:     
In its first 35 years, the U.S. laser industry was characterized by steady growth in output and the number of producers, whereas subsequently the number of producers steadily declined despite continued growth in the industry’s output. A model of industry evolution that features the creation, destruction, and fusing of independent submarkets is developed to explain these two eras. Data on all laser producers are used to test various implications of the model concerning entry, exit, and innovation. The findings suggest that the emergence of an integrative submarket can fundamentally alter an industry’s market structure and the character of innovation, which is applied to explain historical developments in the evolution of various innovative industries.

Number of Pages in PDF File: 48

Keywords: Submarkets, Shakeouts, Innovation

JEL Classification: L11, O33

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Date posted: September 30, 2012 ; Last revised: January 14, 2014

Suggested Citation

Bhaskarabhatla, Ajay and Klepper, Steven, Latent Submarket Dynamics and Industry Evolution: Lessons from the U.S. Laser Industry (November 1, 2013). Forthcoming, Industrial and Corporate Change. Available at SSRN: http://ssrn.com/abstract=2154554 or http://dx.doi.org/10.2139/ssrn.2154554

Contact Information

Ajay Bhaskarabhatla (Contact Author)
Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )
P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands
+31 10 408 1004 (Phone)
HOME PAGE: http://people.few.eur.nl/bhaskarabhatla/
Erasmus Research Institute of Management ( email )
P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1004 (Phone)
HOME PAGE: http://www.erim.eur.nl/people/ajay-bhaskarabhatla/
Steven Klepper
Carnegie Mellon University - David A. Tepper School of Business ( email )
5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States
412-268-3235 (Phone)
412-268-6938 (Fax)
Feedback to SSRN


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