Article,

Competitive Interfirm Dynamics within an Industrial Market System

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Industry and Innovation, 8 (1): 79--107 (April 2001)

Abstract

Scholars concerned with economic processes in industrial economies have long been concerned with the dynamics of firms' adaptation to new circumstances. A study develops a conceptual framework within which industrial dynamics and competitive interfirm interactions can be analyzed in terms of adaptive responses to changes in the complex system of which the firms form part - rather than in terms of anomalies and exceptions, such as the 'market failures' and 'externalities' favored in mainstream microeconomics. In order to do so, a conceptual framework is introduced, dubbed an Industrial Market System, in which firms play a central role as actors, and where their resources, routines and relations with each other generate complex structures such as networks, consortia, and development blocks which mediate and shape the strategic responses made by firms.

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