Abstract

The recent evolution of the European wall-hung boiler market is a particularly interesting case to analyse the role played by sector regulation and technology in affecting firms' strategies for coping with new market conditions. The wall-hung boiler market has changed radically over the last few years due both to technological developments in heating systems, and to the evolution of more energy efficient and comfortable equipment which is less polluting. Sector regulation relating to product stand ards for energy consumption and environmental pollution is also playing a crucial role. In the medium term, competition in the industry will increase: R&D investment will be important to discover and apply renewable energy sources and to develop central heating systems that minimize energy consumption and environmental pollution. In addition, firms will have to comply with the growing demand for a central climate control system for all domestic appliances. In this context, industrial policy and product-market regulation will have a major influence on firms' long-run strategies and the competitiveness of the Italian and European industry.