The Making of an Oligopoly: Firm Survival and Technological Change in the Evolution of the U.S. Tire Industry

Posted: 5 Sep 2000

See all articles by Steven Klepper

Steven Klepper

Carnegie Mellon University - David A. Tepper School of Business

Kenneth L. Simons

Rensselaer Polytechnic Institute (RPI) - Department of Economics

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Abstract

The number of producers in the U.S. tire industry grew for 25 years and then declined sharply, and the industry evolved to be an oligopoly. The role of technological change in shaping the industry's market structure is explored. A model of industry evolution featuring technological change is used to derive predictions that are tested using a novel data set on firm entry, exit, size, location, distribution networks, and technological choices prior to the shakeout of producers. Consistent with the model, earlier-entering and larger firms survived longer, principally because of the influence of age and size on technological change.

JEL Classification: L11, L13, L62

Suggested Citation

Klepper, Steven and Simons, Kenneth L., The Making of an Oligopoly: Firm Survival and Technological Change in the Evolution of the U.S. Tire Industry. Available at SSRN: https://ssrn.com/abstract=240996

Steven Klepper (Contact Author)

Carnegie Mellon University - David A. Tepper School of Business ( email )

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Kenneth L. Simons

Rensselaer Polytechnic Institute (RPI) - Department of Economics ( email )

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