This paper studies strategic industry dynamics of creative destruction in which firms and technologies experience turnover. Theories predict cannibalization between existing and new products delays incumbents’ innovation, whereas preemptive motives accelerate it. Incumbents’ cost...

How far should an industry be allowed to consolidate when competition and innovation are endogenous? We develop a stochastically alternating-move game of dynamic oligopoly, and estimate it using data from the hard disk drive industry, in which a dozen global players consolidated into only three...

We assess the usefulness of patent statistics as an indicator of innovation, using a direct measure of innovation in the hard disk industry (1976--98). Three findings emerge: (1) Patents "predict" innovations better than a random guess, and a simple refinement makes them more useful; (2)...

This paper uncovers a novel pattern of offshoring dynamics in a high-tech industry, and proposes a structural model to explain it. Specifically, the hard disk drive industry (1976-98) witnessed massive waves of entry, exit, and the relocation of manufacturing plants to low-cost countries, in...