Title

Shakeout in the Early Commercial Airframe Industry

Document Type

Article

Language

eng

Publication Date

5-2018

Publisher

Wiley

Source Publication

The Economic History Review

Source ISSN

0013-0117

Abstract

The commercial airframe industry in the US experienced a shakeout from the early 1930s into the post‐Second World War period. Unlike shakeouts in automobiles, tyres, or televisions, the commercial airframe industry's early life cycle was affected by external factors, particularly government demand. Using newly digitized data on all planes introduced in the commercial market between 1926 and 1965, we find that commercial airframe manufacturers with bomber contracts during the Second World War were more likely to have postwar market share than firms without such contracts, controlling for plane characteristics and other forms of government contracting. We attribute the effect of bomber contracts to advantages in R&D learning capacity acquired by firms with military airframe contracts. Despite low (or zero) initial presence in the commercial market, these learning capacity advantages allowed such firms to survive the early period of the shakeout, and later to thrive.

Comments

The Economic History Review, Vol 71, No. 2 (May 2018): 617-638. DOI.

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