Product innovation in the Spanish auto market: Frontier shift and catching-up effects

This paper investigates how product innovation and competition dynamics have driven the evolution of product efficiency in the Spanish auto market. The authors have collected data on more than 75 technical product features and discounted prices for a representative sample of car models commercialized within a 5-year period (2010–2015). Product efficiency is measured for each period by means of Data Envelopment Analysis (DEA). This technique identifies a best-buy technological frontier by comparing the price and product features of the different models. Furthermore, the authors track the dynamic evolution of product efficiency by computing and decomposing Malmquist indexes measuring the overall improvement in the car models analyzed. The decomposition of the Malmquist index brings new insights to the assessment of product innovation. First, the frontier shift indicates how much each model should have improved to simply maintain its comparative competitive appeal. Second, the catching-up effect indicates whether a model is getting closer to or farther away from the new (shifted) best-buy frontier. In the period analyzed the authors find important improvements in product features that were accompanied by price cutting. Both factors have contributed to significantly expand the best-buy frontier outwards. Audi, Volkswagen, Honda, BMW, Kia, Hyundai, Peugeot, Renault and Seat are identified as the brands that have contributed more to expand this frontier. In turn, Renault, Peugeot and Seat show the largest catching-up effects.

• Record URL:
  • https://doi.org/10.1016/j.trd.2016.10.024
• Record URL:
  • http://www.sciencedirect.com/science/article/pii/S1361920915302583
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/13619209
• Supplemental Notes:
  • Abstract reprinted with permission of Elsevier.
• Authors:
  • Gonzalez, Eduardo
  • Arrondo, Ruben
  • Carcaba, Ana
• Publication Date: 2017-1

Language

• English

Media Info

• Media Type: Web
• Features: References;
• Pagination: pp 170-181
• Serial:
  • Transportation Research Part D: Transport and Environment
  • Volume: 50
  • Publisher: Elsevier
  • ISSN: 1361-9209
  • Serial URL: http://www.sciencedirect.com/science/journal/13619209

Subject/Index Terms

• TRT Terms: Automobiles; Competition; Diesel engines; Innovation; Markets; Nonparametric analysis; Productivity
• Uncontrolled Terms: Convergence; Data envelopment analysis
• Geographic Terms: Spain
• Subject Areas: Administration and Management; Economics; Highways; Vehicles and Equipment;

Filing Info

• Accession Number: 01626007
• Record Type: Publication
• Files: TRIS
• Created Date: Feb 15 2017 5:03PM