Abstract

Reconsidering the model of dynamic competition originally presented by J. Steindl (in: "Essays in Honour of M. Kalecky", 1964) relating profit margins and concentration with the rate of growth of the market demand, in a more broad and general purpose, this article states that the optimal structure of an industry in not a constant, but it varies with the industry's life cycle not only in concentration and profit margins, but in other elements of the industrial structure (vertical integration, financing, rate of investments, cooperation policies) as well. This broader interpretation is subsequently tested on the dynamics of the US defence industry for the period when a substantial decrease of military spending of the US Government forced the defence industry into a sharp reorganization process. The conclusion is in favour of a flexible model of industrial policies, including antitrust regulation, to take into account the "natural" trends of change of industries over time, and according to the key conditions of the market demand, the costs and the technologies.