Consumer inertia, firm growth and industry dynamics

Abstract

This paper develops a model of …rm growth and survival emphasizing the interaction between idiosyncratic costs and brand loyalty or consumer inertia (consumer base) and explores its ability to account for various facts on industry dynamics (Dunne, Roberts and Samuelson 1988,89 and Davis Haltiwanger 1992). …rms are born small bigger and older …rms have lower hazard rates bigger and older …rms invest more in cost reductions R&D downward sloping density of …rm sizes Fossati Román (Universidad Carlos III) Consumer inertia, …rm growth and industry dynamics.

DOI: 10.1016/S0022-0531(02)00035-2
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@article{Fishman2003ConsumerIF, title={Consumer inertia, firm growth and industry dynamics}, author={Arthur Fishman and Rafael Rob}, journal={J. Economic Theory}, year={2003}, volume={109}, pages={24-38} }