Inter-firm rivalry and firm growth: is there any evidence of direct competition between firms?

Coad, Alex; Teruel, Mercedes

doi:10.1093/icc/dts018

Cited by 18 publications

(17 citation statements)

References 45 publications

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“…Previous studies have shown diverse conclusions on the relationship between leadership and firm performance. However, these studies did not consider firm size to be a factor and included both small and large firms [38][39][40]. For large firms only, Boone and colleagues (2007) observed that the forces of competition were more significant, and the performance relationship between competing firms was easier to observe [41].…”

Section: Relationship Of Market Leadership and Profitmentioning

confidence: 99%

The Effect of Incremental Innovation and Switching-Over to Architectural Innovation on the Sustainable Performance of Firms: The Case of the NAND Flash Memory Industry

2019

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This paper presents an empirical study that shows the relationship between innovation activities and the sustainable performance of firms in terms of market share and profit. While previous studies of innovation effects have focused on one type of innovation in the industry, such as incremental or radical innovations, the study of both incremental and architectural innovations in the same industry would enrich our understanding of innovation. This study discusses and emphasizes the importance of continuous incremental innovation and how switching-over to architectural innovation affects the sustainable performance of firms in the NAND flash memory industry. A systematic content analysis, comparing the changes in market and profit leadership in terms of continuous incremental innovation and an introduction of architectural innovation, was performed, and it was concluded that both continuous incremental innovation and switching-over to architectural innovation positively affects the sustainable market and profit leadership of firms. Additionally, architectural innovation reframes the technological lifecycle in the industry and gives a firm a chance to retain and continue its technological leadership by establishing new dominant designs. This study suggests that continuous incremental innovation is very important for high-tech firms, and firms should consider the option of switching-over to architectural innovation instead of the incremental development of current dominant design when the complexity of technology and market is increased in order to have a sustainable advantage.Sustainability 2019, 11, 7105 2 of 20 memory is used for the random access of data, it is faster than the NAND flash memory because it provides sequential access to data. However, the structure of the NAND flash is simpler than that of the NOR flash, so it is more convenient and inexpensive to increase its density. Therefore, the NAND type flash is used for the storage of data, and the NOR flash is used for the storage of codes in general [3]; eventually, the NAND flash dominated the flash industry.Since the inception of the flash memory market in the 1980s, the NOR flash memory has been the dominant design and it accounted for 91% of total flash memory revenue in 2000. However, in 2005, NAND flash revenue surpassed that of the NOR flash for the first time due to the emergence of mobile electronics such as cell phones, MP3 players, memory cards and digital cameras. Since then, the NAND flash market has grown significantly, accounting for 53.8 billion USD in sales in 2017 [5]. In 2013, Samsung was able to successfully introduce a Vertical NAND (VNAND) flash to the market in order to overcome scaling issues and tried to lead the architectural innovation by changing the dimensional design of NAND flash technology from 2D to 3D. Competitors followed the development of the VNAND flash memory and the VNAND flash market was expected to exceed the planar NAND flash market in 2017 [5]. The history and characteristics of the dominant design in the flash...

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Section: Relationship Of Market Leadership and Profitmentioning

confidence: 99%

The Effect of Incremental Innovation and Switching-Over to Architectural Innovation on the Sustainable Performance of Firms: The Case of the NAND Flash Memory Industry

2019

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“…Farmers in densely clustered markets can face intense competition (Folta, Cooper, and Baik 2006;Crozet, Mayer, and Mucchielli 2004), which may create a difficult operating environment (Stucke 2013;Coad and Teruel 2013). Such circumstances are likely to be why the density of farmer concentration can reduce farmers' profitability and, ultimately, raise poverty rates.…”

Section: Introductionmentioning

confidence: 99%

Agro-clusters and Rural Poverty: A Spatial Perspective for West Java

Wardhana

Ihle

Heijman

2017

Bulletin of Indonesian Economic Studies

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Neighbouring economies are likely to influence one another. The concentration of farming activities referred to as an 'agro-cluster' generates opportunities for income and employment in a given region and its surrounding area. We analyse the link between poverty rates and agro-clusters by accounting for spatial spillovers. To quantify agroclusters, we employ one input-oriented and one output-oriented measure. Our analysis applies six spatial econometric specifications and focuses on 545 subdistricts of West Java, where about 10% of the population live in poverty. We find that the concentration of agricultural employment substantially reduces poverty in a subdistrict as well as in neighbouring subdistricts. We also find that specialisation in crop outputs has positive impacts on poverty reduction and that localisation externalities are fundamental to agriculture's success. These findings imply that policy interventions may be applied in a spatially selective manner because they will generate spatial-spillover effects on poverty reduction in surrounding areas.

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“…When simulating industrial dynamics it is common to let firms acquire output market shares when they are capable of undercutting the prices of their competitors; that is, when they have higher physical efficiency. Sutton (2007) explores these dynamics and finds that changes in firms' output market shares are independent of each other in most industries while Coad and Teruel (2013) explore the question with a clever econometric technique and show that, when endogeneity is sufficiently accounted for, the negative expected correlation among changes in firms' output market shares can indeed be identified. A theory of selection based on output market shares suggests that the size measure in decomposition analysis is sales or production.…”

Section: Measuring Selectionmentioning

confidence: 99%

“…Coad and Teruel (2013); Bottazzi et al (2010); Coad (2007)) have argued that firms' management may pursue other strategies than growth even when the firm has relatively high productivity, and thus that the effect of productivity on growth depends on a general parameter representing, for example, the propensity to re-invest profits.…”

Section: Introductionmentioning

confidence: 99%

The significance of structural transformation to productivity growth

Holm

2014

J Evol Econ

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This paper critically discusses the most common methodology for decomposing productivity change into inter-and intra-firm effects. It is argued that the methodology can be improved to explicitly take the role of structural transformation into account, and by so doing, a potential source of bias in the results is corrected. This requires the use of a tool from theoretical evolutionary biology: Price's equation.Reviewing a sample of studies applying decomposition analyses shows that the methodology is best suited for studies of the evolution of labour productivity and the reallocation of labour.Based on Danish data for 1992-2010 it is then demonstrated how the results of decomposition analyses can be considerably improved by the explicit inclusion of levels in the selection process. In the specific analysis of the current paper economic selection among industries is included. It is found that the structural transformation of the economy has a large impact on the results of decomposition studies; not least on the magnitude of the inter-firm selection effect. Structural transformation from capital intensive and thus high labour productivity manufacturing towards labour intensive and thus low labour productivity services entails that the traditional methodology is biased downwards in its measure of economic selection.Finally it is demonstrated that the length of the interval being studied, while often determined by data limitations, has a significant but predictable effect on the results, and it is demonstrated tentatively that economic selection tends to be stronger in the trough of the business cycle.

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Inter-firm rivalry and firm growth: is there any evidence of direct competition between firms?

Cited by 18 publications

References 45 publications

The Effect of Incremental Innovation and Switching-Over to Architectural Innovation on the Sustainable Performance of Firms: The Case of the NAND Flash Memory Industry

The Effect of Incremental Innovation and Switching-Over to Architectural Innovation on the Sustainable Performance of Firms: The Case of the NAND Flash Memory Industry

Agro-clusters and Rural Poverty: A Spatial Perspective for West Java

The significance of structural transformation to productivity growth

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