LAUSR

A firm’s initial choice of its submarket may have a long-lasting influence on its subsequent performance. By examining the duration of firm survival in the British automobile industry between 1895 and 1970, we find that a firm’s initial submarket positioning (defined by the quality level of its first-launched model) influenced its subsequent survival. Additionally, we find that the initial positioning also helped firms to survive a major shakeout, and argue that innovation and path-dependence were two possible channels through which the benefits of initial positioning were felt.