Industrial and Corporate Change, Volume 11, Number 4, pp. 645-666
© 2002 Oxford University Press
The capabilities of new firms and the evolution of the US automobile industry
Correspondence: S. Klepper: Department of Social and Decision Sciences, Carnegie Mellon University, Pittsburgh, PA 15213, USA; sk3f{at}andrew.cmu.edu.
Abstract
Firms that diversify into new and existing industries typically outperform de novo entrants, but in some new industries diversifying firms are displaced by later-entering de novo firms. Little is known about when and how new firms can overcome the advantages of diversifying firms. This is investigated for one industry, automobiles, where new firms had considerable success. All the entrants into the industry from its inception in 1895 through 1966 are identified. The heritage of every entrant into the industry is traced, including the founders of de novo entrants, to explore how time of entry and pre-entry experience affected firm survival. While diversifying firms on average outperformed de novo entrants, de novo entrants founded by individuals that worked for the leading automobile firms outperformed all firms and dominated the industry. This is attributed to the novel organizational challenges faced by automobile firms, which made the leading firms ideal training grounds for new entrants. The implications of these findings for firm capabilities, industry competition and regional economic development are discussed.
CiteULike 
Connotea 
Del.icio.us What's this?
This article has been cited by other articles:
|
|
 |
|
  R. Wenting Spinoff dynamics and the spatial formation of the fashion design industry, 1858-2005 J. Econ. Geogr., September 1, 2008; 8(5): 593 - 614. [Abstract] [Full Text] [PDF]
|
|
|
|
|
|
K. Press Divide to conquer? Limits to the adaptability of disintegrated, flexible specialization clusters J. Econ. Geogr., July 1, 2008; 8(4): 565 - 580. [Abstract] [Full Text] [PDF]
|
|
|
|
 |
|
 D. G. Hoopes and T. L. Madsen A capability-based view of competitive heterogeneity Ind. Corp. Change, June 1, 2008; 17(3): 393 - 426. [Abstract] [Full Text] [PDF]
|
|
|
|
 |
|
 A. Pe'er, I. Vertinsky, and A. King Who enters, where and why? The influence of capabilities and initial resource endowments on the location choices of de novo enterprises Strategic Organization, May 1, 2008; 6(2): 119 - 149. [Abstract] [PDF]
|
|
|
|
|
|
Penguin in a new suit: a tale of how de novo entrants emerged to harness free and open source software communities Ind. Corp. Change, October 1, 2007; 16(5): 913 - 943.
|
|
|
|
|
|
K. Frenken and R. A. Boschma A theoretical framework for evolutionary economic geography: industrial dynamics and urban growth as a branching process J. Econ. Geogr., September 1, 2007; 7(5): 635 - 649. [Abstract] [Full Text] [PDF]
|
|
|
|
|
|
P. Maskell and A. Malmberg Myopia, knowledge development and cluster evolution J. Econ. Geogr., September 1, 2007; 7(5): 603 - 618. [Abstract] [Full Text] [PDF]
|
|
|
|
|
|
L. Dahlander Penguin in a new suit: a tale of how de novo entrants emerged to harness free and open source software communities Ind. Corp. Change, August 28, 2007; (2007) dtm026v1. [Abstract] [Full Text] [PDF]
|
|
|
|
|
|
S. A. Zahra, E. Van de Velde, and B. Larraneta Knowledge conversion capability and the performance of corporate and university spin-offs Ind. Corp. Change, August 1, 2007; 16(4): 569 - 608. [Abstract] [Full Text] [PDF]
|
|
|
|
|
|
R. A. Boschma and R. Wenting Spatial evolution of the British automobile industry: Does location matter? Ind. Corp. Change, April 3, 2007; (2007) dtm004v1. [Abstract] [Full Text] [PDF]
|
|
|
|
|
|
R. Martin and P. Sunley Path dependence and regional economic evolution J. Econ. Geogr., August 1, 2006; 6(4): 395 - 437. [Abstract] [Full Text] [PDF]
|
|
|
|
|
|
R. A. Boschma and K. Frenken Why is economic geography not an evolutionary science? Towards an evolutionary economic geography J. Econ. Geogr., June 1, 2006; 6(3): 273 - 302. [Abstract] [Full Text] [PDF]
|
|
|
|
|
|
S. Jong How organizational structures in science shape spin-off firms: the biochemistry departments of Berkeley, Stanford, and UCSF and the birth of the biotech industry Ind. Corp. Change, April 1, 2006; 15(2): 251 - 283. [Abstract] [Full Text] [PDF]
|
|
|
|
|
|
G. Cattani Technological pre-adaptation, speciation, and emergence of new technologies: how Corning invented and developed fiber optics Ind. Corp. Change, April 1, 2006; 15(2): 285 - 318. [Full Text] [PDF]
|
|
|
|
|
|
E. Cefis and O. Marsili A matter of life and death: innovation and firm survival Ind. Corp. Change, December 1, 2005; 14(6): 1167 - 1192. [Abstract] [Full Text] [PDF]
|
|