The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Product Life Cycle

  • Steven Klepper
Reference work entry


The product life cycle connotes the idea that, comparable to humans and other organisms, new industries evolve through distinct and predictable stages. When industries are young, they are subject to high product innovation, rapid output growth, a build-up in the number of producers, and flux in firm market shares. As industries age, product innovation gives way to process innovation, output growth declines, the number of producers goes through a shakeout, and firm market shares stabilize. Evidence supporting this characterization is discussed and three alternative theoretical accounts of it are reviewed.


Innovation Market share Product life cycle 

JEL Classification

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Steven Klepper
    • 1
  1. 1.