The learning curve, technology barriers to entry, and competitive survival in the chemical processing industries
Article first published online: 8 NOV 2006
Copyright © 1989 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 10, Issue 5, pages 431–447, September/October 1989
How to Cite
Lieberman, M. B. (1989), The learning curve, technology barriers to entry, and competitive survival in the chemical processing industries. Strat. Mgmt. J., 10: 431–447. doi: 10.1002/smj.4250100504
- Issue published online: 8 NOV 2006
- Article first published online: 8 NOV 2006
- Manuscript Revised: 10 OCT 1988
- Manuscript Received: 4 APR 1988
This paper evaluates entry and survival rates in a sample of 39 chemical product industries. The analysis focuses on learning-based cost advantages potentially held by incumbent firms. A logit model of entry gives no evidence that entry decisions were sensitive to the cumulative production lead held by incumbents. Entry was facilitated by the fact that for most products, technology was available from a range of sources. A hazard function model reveals that entrant survival rates were unrelated to order of entry or source of process technology. However, survival was adversely affected when the leading incumbent held a large cumulative output advantage or when entrants built plants of sub-optimal scale. Thus, a large incumbent lead in production experience did not deter new entry but did reduce the entrant'S probability of survival.