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AER - Previous Issues
 AER - March 2007

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American Economic Review

Vol. 97, No. 1, March 2007

Market Share Dynamics and the "Persistence of Leadership" Debate
John Sutton

Article Citation
Sutton, John 2007. "Market Share Dynamics and the "Persistence of Leadership" Debate." American Economic Review, 97(1): 222–241.
DOI:10.1257/aer.97.1.222

Abstract
A new 45-industry, 23-year, dataset for Japan is used to investigate the duration of industry leadership. A new scaling relationship linking a firm's current market share with the standard deviation of market share changes is reported. This relationship discriminates in a powerful way between rival candidate theoretical models of market share dynamics. It also makes possible a useful simplification in testing a benchmark model of a Markovian kind. Relative to that model, it is found that at least some industries display a "Chandlerian" bias toward longer durations of leadership than would be present in the benchmark model. (JEL D43, L13)

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Sutton, John