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How do entrants build market share?: The role of demand frictions

Research output: Working paper

Unpublished

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How do entrants build market share? The role of demand frictions. / Argente, David; Fitzgerald, Doireann; Moreira, Sara et al.
SSRN Working Paper, 2021. (Kilts Center at Chicago Booth Marketing Data Center Paper Series).

Research output: Working paper

Harvard

Argente, D, Fitzgerald, D, Moreira, S & Priolo, A 2021 'How do entrants build market share? The role of demand frictions' Kilts Center at Chicago Booth Marketing Data Center Paper Series, SSRN Working Paper. <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3831706>

APA

Argente, D., Fitzgerald, D., Moreira, S., & Priolo, A. (2021). How do entrants build market share? The role of demand frictions. (Kilts Center at Chicago Booth Marketing Data Center Paper Series). SSRN Working Paper. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3831706

Vancouver

Argente D, Fitzgerald D, Moreira S, Priolo A. How do entrants build market share? The role of demand frictions. SSRN Working Paper. 2021 Apr 24. (Kilts Center at Chicago Booth Marketing Data Center Paper Series).

Author

Argente, David ; Fitzgerald, Doireann ; Moreira, Sara et al. / How do entrants build market share? The role of demand frictions. SSRN Working Paper, 2021. (Kilts Center at Chicago Booth Marketing Data Center Paper Series).

Bibtex

@techreport{319188a3d9d5441cae3df0ccea87cd87,
title = "How do entrants build market share?: The role of demand frictions",
abstract = "Firms are born small, grow, and die. We investigate an explanation for this process based on frictions in the accumulation of customers, across and within markets segmented by geography. We use matched retail scanner and TV advertising data on consumer food to show that entrants grow both by adding customers in new markets and by reaching new customers in continuing markets. Growth in market share within markets is not associated with changes in markups, but is associated with advertising. We use these facts to motivate and estimate a structural model of customer accumulation within and across markets. This allows us to estimate both the distribution of intrinsic heterogeneity across firms, and frictions in the accumulation of customers. We find that these frictions contribute substantially to heterogeneity in firm size, and to the gradual process of firm growth.",
author = "David Argente and Doireann Fitzgerald and Sara Moreira and Anthony Priolo",
year = "2021",
month = apr,
day = "24",
language = "English",
series = "Kilts Center at Chicago Booth Marketing Data Center Paper Series",
publisher = "SSRN Working Paper",
type = "WorkingPaper",
institution = "SSRN Working Paper",

}

RIS

TY - UNPB

T1 - How do entrants build market share?

T2 - The role of demand frictions

AU - Argente, David

AU - Fitzgerald, Doireann

AU - Moreira, Sara

AU - Priolo, Anthony

PY - 2021/4/24

Y1 - 2021/4/24

N2 - Firms are born small, grow, and die. We investigate an explanation for this process based on frictions in the accumulation of customers, across and within markets segmented by geography. We use matched retail scanner and TV advertising data on consumer food to show that entrants grow both by adding customers in new markets and by reaching new customers in continuing markets. Growth in market share within markets is not associated with changes in markups, but is associated with advertising. We use these facts to motivate and estimate a structural model of customer accumulation within and across markets. This allows us to estimate both the distribution of intrinsic heterogeneity across firms, and frictions in the accumulation of customers. We find that these frictions contribute substantially to heterogeneity in firm size, and to the gradual process of firm growth.

AB - Firms are born small, grow, and die. We investigate an explanation for this process based on frictions in the accumulation of customers, across and within markets segmented by geography. We use matched retail scanner and TV advertising data on consumer food to show that entrants grow both by adding customers in new markets and by reaching new customers in continuing markets. Growth in market share within markets is not associated with changes in markups, but is associated with advertising. We use these facts to motivate and estimate a structural model of customer accumulation within and across markets. This allows us to estimate both the distribution of intrinsic heterogeneity across firms, and frictions in the accumulation of customers. We find that these frictions contribute substantially to heterogeneity in firm size, and to the gradual process of firm growth.

M3 - Working paper

T3 - Kilts Center at Chicago Booth Marketing Data Center Paper Series

BT - How do entrants build market share?

PB - SSRN Working Paper

ER -