Market Share Instability, Concentration, and Trade in Japanese Industries

Abstract

This paper evaluates and extends earlier studies by Sakakibara and Porter (200 I) and by Doi (2001) on the market share instability ofleading Japanese firms. Using the data set provided by Sakakibara and Porter, I reexamine the determinants of market share instability, correct some empirical problems, and test a more parsimonious model. My results refute Sakakibara and Porter's conclusions and show general support for Doi's findings. I find that in tight oligopolistic markets, high concentration and stable firm positions are consistent and compatible occurrences. Finally, outside pressures are more important than internal industry characteristics in explaining domestic rivalry in Japan. (LJ)