Dominance by birthright: entry of prior radio producers and competitive ramifications in the U.S. television receiver industry

Abstract

The U.S. television receiver industry evolved to be an oligopoly dominated by firms that produced radios prior to TVs. Data on the experience of all U.S. radio manufacturers and on the length of survival and rate of innovation of all U.S. TV entrants are collected to analyze how radio experience influenced entry, firm performance, and the evolution of market structure in the TV industry. Consistent with a model of the evolution of an oligopolistic industry, more experienced radio firms were more likely to enter TV manufacturing, had higher innovation rates, and in turn had greater market shares and longer survival, suggesting that firm capabilities and the evolution of the TV industry's market structure were critically shaped by firms' experience prior to entry. Copyright © 2000 John Wiley & Sons, Ltd.