The changing nature of competition in the US manufacturing sector, 1950—2002

Recent work in several disciplines has established that the volatility of performance for US firms has greatly increased over the last 50 years. Yet, it is the differences in durable performance of firms that have been the primary focus of inquiry in competition and business strategy. This study documents the sharply increased within-industry heterogeneity of returns in the US manufacturing sector from 1950 to 2002, and links these changes to the documented increases in volatility. The evidence supports a broad, monotonic shift towards a new, more dynamic form of competition, which some have called hypercompetition.