The turnover of market leaders in UK manufacturing industry, 1979-86

This paper examines data on the turnover of the five top ranked firms in 54 three-digit manufacturing industries in the UK over the period 1979-86. Two benchmarks are developed to help to decide whether observed turnover rates are ''high'' or ''low''. As it turns out, actual turnover rates are considerably lower than those generated by both of them, suggesting that market structures in the UK are relatively rigid. A model of firm growth rates is estimated to cast some light on why turnover rates are relatively low, and the results suggest that high advertising and innovation rates amongst top ranked firms help to preserve their place in the top five ranking, despite the fact that firm size displays a weak tendency to regress towards the mean.