Relatedness and Industry Structure

10 December 2009 at 9:54 am 3 comments

| Lasse Lien |

According to this, shameless self-promotion is OK. So here is a recent Lien and Foss paper (from MDE). The abstract goes as follows:

This paper reports two new empirical regularities concerning industry concentration. First, concentration levels closely correlate in related industries. Second, the correlation is moderated by the degree of relatedness between the industries. These regularities are derived from the Trinet database, using a survivor-based measure of relatedness. We argue that these previously overlooked relations may be explained in terms of (1) spillover effects between industries and (2) life cycle factors.

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3 Comments Add your own

  • 1. Niklas Hallberg  |  11 December 2009 at 5:18 am

    On a related issue. The relationship between factor and product markets has lately been given some attention in strategic management (e.g. cooperative game theory approaches). So what about vertical market relationships and the correlation of concentration levels between up and down stream industries? Can anyone recommend some good studies on this?

  • 2. Lasse  |  11 December 2009 at 7:06 am

    Hi Niklas,
    I cannot recall seeing any empirical work that adresses vertical relations specifically. Our work does not distinguish vertical from horisontal relatedness, but lumps them both together. A paper comparing and contrasting the impact of vertical and horisontal relatedness on market structure sounds like a worthwhile project…

  • 3. srp  |  11 December 2009 at 10:55 pm

    That would be the old Galbraith “American Capitalism” thesis about countervailing power in vertical chains…the first and last piece of serious scholarship he ever performed.

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Our Recent Books

Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).

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