Abstract
Firm numbers first rise, then later fall, as an industry evolves. This nonmonotonicity is explained using a competitive model in which innovation opportunities fuel entry and relative failure to innovate prompts exit; equilibrium time paths for price and quantity also share features of the data. The model is estimated using data from the US automobile tire industry, a particularly dramatic example of the nonmonotonicity in firm numbers. -Authors
| Original language | English (US) |
|---|---|
| Pages (from-to) | 322-347 |
| Number of pages | 26 |
| Journal | Journal of Political Economy |
| Volume | 102 |
| Issue number | 2 |
| DOIs | |
| State | Published - 1994 |
ASJC Scopus subject areas
- Economics and Econometrics