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- Title
THE LEARNING CURVE, TECHNOLOGY BARRIERS TO ENTRY, AND COMPETITIVE SURVIVAL IN THE CHEMICAL PROCESSING INDUSTRIES.
- Authors
Lieberman, Marvin B.
- Abstract
This paper evaluates entry and survival rates in a sample of 39 chemical product industries. The analysis focuses on learning-based cost advantages potentially held by incumbent firms. A logit model of entry gives no evidence that entry decisions were sensitive to the cumulative production lead held by incumbents. Entry was facilitated by the fact that for most products, technology was available from a range of sources. A hazard function model reveals that entrant survival rates were unrelated to order of entry or source of process technology. However, survival was adversely affected when the leading incumbent held a large cumulative output advantage or when entrants built plants of sub-optimal .scale. Thus, a large incumbent lead in production experience did not deter new entry but did reduce the entrant's probability of survival.
- Subjects
BUSINESS success; MARKET entry; LEARNING curve; MARKET share; STRATEGIC planning; COMPETITIVE advantage in business; BUSINESS planning; ORGANIZATIONAL learning; INDUSTRIAL costs; PRODUCT management
- Publication
Strategic Management Journal (John Wiley & Sons, Inc.) - 1980 to 2009, 1989, Vol 10, Issue 5, p431
- ISSN
0143-2095
- Publication type
Article
- DOI
10.1002/smj.4250100504