Turnover of Firms As a Measure of Market Behavior
FIRM turnover, that is, the change in rank among the leading firms, has had a long, if undistinguished, history as a measure of competition. To the best of our knowledge, it was first proposed by Rufus S. Tucker 1 in I936 and later used by Edwin B. George.2 In I953 A. D. H. Kaplan and Alfred E. Kahn 3 revived interest in the measure and more recently it has been applied by Jules Joskow.4 Recent work on the growth rate of firms by P. E. Hart and S. J. Prais,5 and H. A. Simons and C. P. Bonini 6 has led them to encourage its use, not merely as a supplement to concentration ratios but as a replacement. The Kaplan and Kahn results were subject to a barrage of criticism. Stigler,7 Markham 8 and Adelman I pointed out serious errors of fact and interpretation. But the usefulness of the turnover concept itself has not been questioned. The purpose of this article is to examine the turnover concept, to suggest that it is not very useful, and to propose another measure which is, in the authors' view, more defensible from the viewpoint of both economic and statistical theory.
- DOI
- 10.2307/1926627
- Volume
- 44 (1)
- Pages
- 82
- Export
- BibTeX
- Sources
- openalex crossref