Figure 2.
The four-cell matrix is organised by previous conditions and previous market share. The top headings are Low previous market share subscript t with Low market power and High previous market share subscript t with High market power. The left column lists Low previous profitability subscript t with Low profit efficiency and High previous profitability subscript t with High profit efficiency. Each of the four cells contains an upward arrow labelled Profitability subscript t plus 1. Beneath each arrow appears the expression Research and Development subscript i t plus M i subscript i t plus M i subscript i t multiplied by Research and Development subscript i t.Quadrants of past competitive performance achievements for testing H5 – H5a–H5d