Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-25T09:30:58.880Z Has data issue: false hasContentIssue false
  • English
  • Français

Escape from Equilibrium: Thinking Historically about Firm Responses to Competition

Published online by Cambridge University Press:  18 February 2015

Margaret C. Levenstein
Get access Rights & Permissions [Opens in a new window]

Abstract

Firms use a variety of strategies to limit competition that would otherwise erode profits. Firms innovate, creating new technologies, new markets, and new firms. Innovations allow them to distinguish their products or lower their costs and thus maintain profits. Their ability to innovate depends on the existence of social institutions that allow them to amass the resources—labor, capital, and information—necessary to compete successfully. Firms also maintain profits by manipulating the political process to maintain preferred access to markets, technology and resources. Finally, firms take actions to limit competition directly. Waves of consolidation, justified by an assumption of the inevitability of increasing firm size, have limited competition and entrepreneurship. Cartels and other forms of collusion, sometimes thought to have disappeared from US markets after the adoption of the Sherman Antitrust Act in 1890, are still active in a wide variety of national and international markets.

Type
Presidential Address
Information
Enterprise & Society , Volume 13 , Issue 4 , December 2012 , pp. 710 - 728
Copyright
Copyright © The Author(s) 2012. Published by Cambridge University Press on behalf of the Business History Conference. All rights reserved.

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bibliography of Works Cited

Books

Balleisen, Edward. Navigating Failure: Bankruptcy and Commercial Society in Antebellum America. Chapel Hill: University of North Carolina Press, 2001.Google Scholar
Bernstein, Michael. The Great Depression: Delayed Recovery and Economic Change in America, 1929–1939. Cambridge: Cambridge University Press, 1989.Google Scholar
Chandler, Alfred. The Visible Hand: The Managerial Revolution in American Business. Cambridge, MA: Belknap Press, 1975.Google Scholar
Fairlie, Robert W. and Robb, Alicia M. Race and Entrepreneurial Success: Black, Asian, and White-Owned Businesses in the United States. Cambridge, MA: MIT Press, 2008.CrossRefGoogle Scholar
Foley, Duncan. Understanding Capital: Marx–s Economic Theory. Cambridge, MA: Harvard University Press, 1986.CrossRefGoogle Scholar
Great Britain Board of Trade. Survey of International Cartels and Internai Cartels, 1944 and 1946. Central Library, Department of Industry, 1976.Google Scholar
Johnson, Simon and Kwak, James. 13 Bankers: The Waii Street Takeover and the Next Financiai Meitdown. New York: Vintage, 2011.Google Scholar
Kolko, Gabriel. The Triumph of Conservatism: A Reinterpretation of American History, 1900–1916. New York: The Free Press, 1963.Google Scholar
Lamoreaux, Naomi R. The Great Merger Movement in American Business, 1895–1904. Cambridge: Cambridge University Press, 1985.CrossRefGoogle Scholar
Lazonick, William. Business Organization and the Myth of the Market Economy. Cambridge: Cambridge University Press, 1991.Google Scholar
Levenstein, Charles and John, Wooding. At the Point of Production. New York: Guilford, 1999.Google Scholar
Levenstein, Margaret. Accounting for Growth: Information Systems and the Creation of the Large Corporation. Palo Alto, CA: Stanford University Press, 1998.Google Scholar
Mann, Bruce H. Repubiic of Debtors: Bankruptcy in the Age of Independence. Cambridge, MA: Harvard University Press, 2002.Google Scholar
Marx, Karl. Capital, v. III. New York: International Publishers, 1967.Google Scholar
Penrose, Edith. The Theory of the Growth of the Firm. New York: John Wiley and Sons, 1959.Google Scholar
Porter, Glenn and Livesay, Harold C. Merchants and Manufacturers: Studies in the Changing Structure of Nineteenth Century Marketing. Chicago: Ivan R. Dee, 1989.Google Scholar
Sabel, Charles and Zeitlin, Jonathan. World of Possibilities: Flexibility and Mass Production in Western Industrialization. Cambridge: Cambridge University Press, 1997.CrossRefGoogle Scholar
Scherer, Frederick M. Competition Policies for an Integrated World Economy. Washington, DC: Brookings Institutional Press, 1994.Google Scholar
Scranton, Philip. Endless Novelty: Specialty Production and American Manufacturing, 1865–1925. Princeton, NJ: Princeton University Press, 2000.Google Scholar
Spar, Debora L. The Cooperative Edge: The Internal Politics of International Cartels. Ithaca, NY: Cornell University Press, 1994.Google Scholar
Symeonidis, George. The Effects of Competition: Cartel Policy and the Evolution of Strategy and Structure in British Industry. Cambridge, MA: MIT Press, 2002.CrossRefGoogle Scholar

Articles and Chapters

Allen, Robert C. “Collective Invention,” Journal of Economic Behavior & Organization 4 (March 1983): 1–24.CrossRefGoogle Scholar
Bresnahan, Timothy F. and Raff, Daniel M. G.. “Intra-Industry Heterogeneity and the Great Depression: The American Motor Vehicles Industry, 1929–1935,” Journal of Economic History 51 (June 1991): 317–31.CrossRefGoogle Scholar
Bryant, Peter G. and Eckard, E. W.. “Price Fixing: The Probability of Getting Caught,” Review of Economics and Statistics 73 (1991): 531–6.CrossRefGoogle Scholar
Davidow, Joel. “Cartels, Competition Laws and the Regulation of International Trade,” New York University Journal of International Law and Politics 15 (1982): 351–76.Google Scholar
Foster, Lucia, Haltiwanger, John and Syverson, Chad. “Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?” American Economic Review 98 (February 2008): 394–425.CrossRefGoogle Scholar
Fridenson, Patrick. “Business Failure and the Agenda of Business History,” Enterprise & Society 5 (2004): 562–82.CrossRefGoogle Scholar
Haltiwanger, John C., Jarmin, Ron S. and Miranda, Javier. Who Creates Jobs? Small Vs. Large Vs. Young. Working Paper. National Bureau of Economic Research, August 2010.CrossRefGoogle Scholar
Hurst, Erik and Pugsley, Benjamin Wild. “What Do Small Businesses Do?” Brookings Papers on Economic Activity (March 2011): 73–118.CrossRefGoogle Scholar
Lamoreaux, Naomi R., Levenstein, Margaret C. and Sokoloff, Kenneth L. “Financing Invention During the Second Industrial Revolution: Cleveland, Ohio, 1870“1920.” In Financing Innovation in the United States, 1870 to the Present, edited by Lamoreaux, Naomi R. and Sokoloff, Kenneth L. 39–84. Cambridge, MA: MIT Press, 2007.CrossRefGoogle Scholar
Lamoreaux, Naomi R. “Mobilizing Venture Capital During the Second Industrial Revolution: Cleveland, Ohio, 1870-1920.” Capitalism and Society 1 (January 2006).CrossRefGoogle Scholar
Levenstein, Margaret C. “Antitrust and Business History,” Southern California Law Review 85 (March 2012): 451–8.Google Scholar
Levenstein, Margaret C. “Mass Production Conquers the Pool: Firm Organization and the Nature of Competition in the Nineteenth Century.” Journal of Economic History 55 (1995): 575–611.CrossRefGoogle Scholar
Levenstein, Margaret C. and Suslow, Valerie Y. “Cartels and Collusion: Empirical Evidence.” In Oxford Handbook on International Anti-Trust Economics, edited by Blair, Roger D. and Daniel Sokol, D. Forthcoming.Google Scholar
Levenstein, Margaret C. “Contemporary International Price-Fixing Cartels and Developing Countries: A Discussion of Effects and Policy Remedies.” Antitrust Law Journal 71 (2004): 801–52.Google Scholar
Levenstein, Margaret C. “Determinants of Cartel Duration and the Role of Cartel Organization,” Journal of Law and Economics 54 (2011): 455–92.CrossRefGoogle Scholar
Levenstein, Margaret C. “International Cartels: Prevalence and Policy Treatment in Different Epochs.” In Issues in Competition Law and Policy, edited by Collins, Wayne D. Chicago: ABA Section of Antitrust Law, 2008.Google Scholar
Levenstein, Margaret C. “The Determinants of Cartel Duration from the Nineteenth to the Twenty-first Centuries.” In How Cartels Endure and How They Fail: Studies of Industrial Collusion, edited by Grossman, Peter D. Cheltenham, UK: Edward Elgar Publishing, 2004.Google Scholar
Nussbaum, Helga. “International Cartels and Multinational Enterprises.” In Multinational Enterprise in Historical Perspective, edited by Teichova, Alice, Lévy-Leboyer, Maurice and Nussbaum, Helga 131–4. Cambridge: Cambridge University Press, 1986.Google Scholar
Olson, Mary K. “Managing Delegation in the FDA: Reducing Delay in New-Drug Review.” Journal of Health Politics, Policy & Law 29 (June 2004): 397–30.CrossRefGoogle ScholarPubMed
Parker, William. “From Northwest to Midwest: Social Bases of a Regional History.” In Essays in Nineteenth Century Economic History: The Old Northwest, edited by Klingaman, David C. and Vedder, Richard K. Athens, OH: Ohio University Press, 1975.Google Scholar
Raff, Daniel M. G. “Representative Firm Analysis and the Character of Competition: Glimpses from the Great Depression.” American Economic Review 88 (May 1998): 57–61.Google Scholar
Sabel, Charles and Zeitlin, Jonathan. “Historical Alternatives to Mass Production: Politics, Markets and Technology in Nineteenth-Century Industrialization.” Past & Present 108 (1985): 133–76.CrossRefGoogle Scholar
Sokoloff, Kenneth L. “Inventive Activity in Early Industrial America: Evidence from Patent Records, 1790–1846.” Journal of Economic History 48 (December 1988): 813–50.CrossRefGoogle Scholar
Tufano, Peter. “Business Failure, Judicial Intervention, and Financial Innovation: Restructuring U.S. Railroads in the Nineteenth Century.” Business History Review 71 (1997): 1–40.CrossRefGoogle Scholar

Newspapers and Magazines

Bell, Dawson. “Ambassador Bridge Owners Spent Nearly $5M in Ads in Attacks on Proposed Span.” Detroit Free Press (September 19, 2011).Google Scholar
Bell, Dawson and Walsh, Tom. “New Bridge in Canada will be Built, Governor Says.” Detroit Free Press (November 3, 2011).Google Scholar
Ramsey, Mike. “Corporate News: Ford Extends Its $9 Billion Credit Line through 2015.” Wall Street Journal (March 16, 2012), B.2.Google Scholar
Stewart, James B. “Volcker Rule, Once Simple, Now Boggles.” New York Times (October 21, 2011).Google Scholar
Taibbi, Matt. “Looting Main Street.” Rolling Stone (April 15, 2010), Issue 1102, 33.Google Scholar
Taibbi, Matt. “The Scam Wall Street Learned from the Mafia.” Rolling Stone (June 21, 2012).Google Scholar

Unpublished Materials

Atalay, Enghin, Hortacsu, Ali and Syverson, Chad. “Why Do Firms Own Production Chains?” U.S. Census Bureau working paper 09–31, Center for Economics Studies. Last modified April 2012. http://home.uchicago.edu/syverson/viplantevidence.pdf. Last accessed August 28, 2012.Google Scholar
Cole, C. A. “Regional Stock Exchanges.” Unpublished manuscript on file at the Baker Library, Harvard Business School, 1943.Google Scholar
Coleman, Andrew. “The Effect of Transport Infrastructure on Home Production Activity: Evidence from Rural New York, 1825–1845.” Manuscript, Motu Economic and Public Policy Research, Wellington, New Zealand, 2009.Google Scholar
Davis, Gerald. “Re-Imagining the Corporation.” Paper presented to the American Sociological Association 2012 annual meeting. Last modified April 24, 2012, http://www.realutopias.com/wp-content/uploads/2012/04/Davis-Real-Utopia-Essay-reimagining-the-corporation-updated-4-24-12.pdf. Last accessed August 28, 2012.Google Scholar
Davis, Gerald Blair, Margaret and Weiman, David. “Whither the Corporation?” Presidential Plenary at the 2012 Business History Conference, http://www.thebhc.org/publications/BEHonline/2012/program12.html. Last accessed August 28, 2012.Google Scholar
Frohlich, Xaq. “Accounting for Taste: Regulating Food Labeling in the ‘Affluent Society,’ 1945–1995.” MIT dissertation in the Program in History, Anthropology, and Science, Technology and Society, 2011.Google Scholar
Lee, Yoonsoo and Mukoyama, Toshihiko. “Entry, Exit, and Plant-Level Dynamics over the Business Cycle.” U.S. Census Bureau Working Paper 08–17, Center for Economic Studies. Last modified June 2008. http://ideas.repec.org/p/cen/wpaper/08-17.html. Last accessed August 28, 2012.Google Scholar
López-Morell, Miguel A. and Segreto, Luciano. “The International Mercury Cartel, 1928–1949.” Working paper presented at the 2012 Business History Conference, http://www.thebhc.org/publications/BEHonline/2012/abstracts12.html. Last accessed August 28, 2012.Google Scholar
Pugsley, Ben. “Selection and the Role of Small Business Owners in Firm Dynamics.” Working Paper. Last modified November 18, 2011, http://home.uchicago.edu/~bpugsley/research/pugsley_smallbus_selection_jmp_nov18.pdf. Last accessed August 28, 2012.Google Scholar
Storli, Espen. “When Business Systems Collide: Alcoa and the International Aluminum Cartel in the Interwar Period.” 2012 Business History Conference, available at http://www.thebhc.org/publications/BEHonline/2012/abstracts12.html. Last accessed August 28, 2012.Google Scholar

Archives

Business and Economic History Archives. Program of Conference. Vol. 18 (1989), http://www.thebhc.org/publications/BEHprint/toc181989.html. Last accessed August 28, 2012.Google Scholar
Dow, Herbert. Letter from Dow, Herbert to Convers, A.E., March 25, 1907. Post Street Archives file #070013.Google Scholar
U.S. Department of Justice. Reports of Section 1 Sherman Act Criminal Convictions. Trade Regulation Reporter (CCH).Google Scholar

Online Material

Bresnahan, Timothy F. and Raff, Daniel M. G. “Census of Manufactures, Motor Vehicle and Textile Industry Plants, 1929, 1931, 1933, 1935 [United States].” Interuniversity Consortium for Political and Social Research, ICSPR Study number 31761, http://dx.doi.org/10.3886/ICPSR31761.v1. Last accessed August 28, 2012.Google Scholar
U.S. Department of the Treasury. “Office of Financial Research Created under the Dodd-Frank Wall Street Reform and Consumer Protection Act: Frequently Asked Questions.” http://www.treasury.gov/initiatives/Documents/OFR_FAQ-11242010-FINAL.PDF. Last accessed August 28, 2012.Google Scholar
U.S. Justice Department Antitrust Division. “Sherman Act Violations Yielding a Corporate Fine of $10 Million or More.” Last modified June 21, 2012, http://www.justice.gov/atr/public/criminal/sherman10.html. Last accessed August 28, 2012.Google Scholar
U.S. Securities and Exchange Commission. Bank Deposit Data. http://www.sec.gov. Last accessed August 28, 2012.Google Scholar