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The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 138:
The Survival of New Products

Marcus Asplund and Rickard Sandin

Abstract: We study the product turnover in an industry and, in particular, the survival of new products. The data set consists of monthly sales of all products sold in the Swedish beer market over the time period of 1989-1995. The death rates of newly introduced products are high - out of 199 products an estimated 25 percent were withdrawn within 18 months and 50 percent within approximately 48 months. We use parametric duration models with time varying covariates to estimate survival functions. Our results show that products with low and decreasing market shares have higher hazard rates. Moreover, the hazard rates are dependent on the characteristics of the producer. Products from firms with a large number of other products, and (to a lesser extent) the largest market shares are more likely to be withdrawn.

Keywords: Product survival; multiproduct firms; duration models; beer market; (follow links to similar papers)

JEL-Codes: C41; L13; L66; (follow links to similar papers)

26 pages, November 1996

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This paper is published as:
Asplund, Marcus and Rickard Sandin, (1999), 'The Survival of New Products', Review of Industrial Organization, Vol. 15, pages 219-237



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