the case of the synthetic dye industry, 1857–1914 - Maastricht ...

188 J.P. Murmann and E. Homburg
Fig. 3. Number of dye firms by country, 1857–1914
to count also the number of intermediate chemical makers, which were numerous
in France. Between 1862 and 1870 a constant steep decline occurred in the
French synthetic dye industry from 21 to 7 firms (40 firms to 15 including intermediate
makers). Between 1870 and 1914 the number of firms in the French
dye industry stayed at a remarkably constant low level. 13 France is a clear example
of an industry shakeout that appears to characterize many industries. The
automobile industry is perhaps the most prominent case of a severe industry
shakeout documented in the literature (Carroll and Hannan, 1995; Klepper and
Simmons, 1997). Carroll and Hannan report that between 1920 and 1930 the
American automobile industry and between 1924 and 1934 the German, British
and French automobiles industries all experienced a severe shakeout. In the case
of the French dye industry, however, the shakeout came much more quickly than
in the automobile industry. Carroll and Hannan (1995, p. 195) place the start
of the French automobile industry in 1885, with the shakeout happening about
40 years later. In the French dye industry the shakeout occurred within about
a decade after the start of the synthetic dye industry in 1858. Carroll and Hannan
(2000) speculate that in high-tech industries shake-outs come more quickly.
Synthetic dyes undoubtedly were a high-tech industry in the 19 th century, partly
confirming the Carroll-Hannan hypothesis. But the fact that a clear shake-out
only occurred in the French dye industry and not the other countries suggests
13 The graph does not show a decline of the number of firms in the wake of the Franco-Prussian
war. The loss of the few Alsatian firms was compensated by the formation of new French firms.