Learning, market selection and the evolution of industrial structures

Industrial economics is a rich source of 'puzzles' for economic theory. One of them - certainly the most discussed - regards the co-existence of firms (and plants) of different sizes, displaying rather invariant skewed distributions. Other 'puzzles', however, concern the sectoral specificities in industrial structhres, the persistence of asymmetric corporate performances and the dynamics of entry and exit. The paper reports some preliminary results on evolutionary modeling of the links between the microeconomics of innovation, the patterns of industrial change and some observable invariances in industrial structures. First, the paper reviews a few of these empirical regularities in structures and in the patterns of change. Second, the paper discusses the achievements and limits of interpretations of the evidence based on equilibrium theories. Finally, it presents a model where these regularities are explained as emergent properties deriving from non equilibrium interactions among technologically heterogeneous firms. Moreover, simulation exercises show that also the intersectoral variety in the observed industrial structures and dynamics can be interpreted on the grounds of underlying specificities in the processes of technological learning - which is called 'technological regimes' - and of the processes of market interactions - i.e. 'market regimes'.