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| Author: | Deneffe, D. |
| Title: | Cost externalities and corporate diversification. |
| Journal: | International Journal of Industrial Organization
1993 : JUN, VOL. 11:2, p. 261-282 |
| Index terms: | COSTS DIVERSIFICATION MODELS EXTERNALITIES |
| Language: | eng |
| Abstract: | This paper examines the optimal time of entry by established firms that strategically exploit cost externalities resulting from experience transfer from their core product line to the entered market. Established firms may delay entry even under conditions when newborn firms would enter early. The paper can also explain other entry scenarios, including early diversification at an initial loss into markets that newborn firms would never enter. The shape of the experience curve in the entered market strongly affects these differences in scenarios. |
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