Chance, necessity and competitive dynamics in the Italian Steel Industry

This paper reports on the first stages of an empirical investigation into the evolutionary dynamics of the competitive process in the Italian Steel Industry. Central to this investigation is that the mode and tempo of change within well-defined populations of firms are driven by the evolutionary competitive processes of development and selection. The purpose of the paper is to assess the relative importance of these different evolutionary processes to the pattern of change in the Italian Steel Industry. To provide for this, first, a discrete time selection model is introduced. Second, this model is confronted with the empirical data. It is shown that in a mature sector — as the Italian Steel industry — the development term is the major factor driving the decrease in the average unit costs in the population, whilst the selection factor seems to play a major role.