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THE EFFECT OF TECHNICAL CHANGE ON MARKET STRUCTURE
Author(s) -
GORT MICHAEL,
WALL RICHARD A.
Publication year - 1984
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1984.tb00714.x
Subject(s) - technical change , industrial organization , economics , product (mathematics) , technological change , product innovation , market structure , product lifecycle , new product development , microeconomics , macroeconomics , productivity , management , geometry , mathematics
The paper examines the effects of technical change on market structure. It is found that: 1) the role of independent inventors and small firms is much more important in the early stages of the evolution of a product; 2) the net effect of innovations on entry reverses itself over the product cycle; 3) there is a shift in the importance of various sources of innovation over the product cycle. The two forces which contribute to this result are: 1) a decline in the importance of innovations as technology matures and 2) the proliferation of products adapted to specialized uses.