FIRM SURVIVAL AND THE EVOLUTION OF MARKET STRUCTURE IN THE JAPANESE MOTORCYCLE INDUSTRY

This paper explores firm survival and the evolution of market structure in the Japanese motorcycle industry over the period 1946-1965. In the post-war era, the number of firms grew rapidly and peaked in 1953 at 200, and then declined sharply for the first 20 years. As a consequence, only four firms survived, and the industry evolved to be an oligopoly. To address what factors caused the shakeout of firms, we examine the determinants of firm survival, with a focus on the role of product strategies. We provide evidence that early and experienced entrants tend to survive longer than late and inexperienced ones. In addition, it is found that firms located in clusters are more likely to survive than others. Our findings also indicate that offering high-quality products and broadening product-lines have significantly positive effects on survival. Moreover, we found that the probability of failure first falls and then rises with increasing degrees of product-line overlap with rivals.