A Bayesian test of the product cycle hypothesis applied to Japanese crude steel production

It is postulated that the product cycle of crude steel production may be observed as a gradual shift in the time trend parameter in the family of the CES production functions. Quarterly data from 1957 to 1973 are used for the empirical test. Posterior pdf's for the join point as well as for the adjustment parameter are derived, and they indicate that Japanese crude steel production passed from the new to standardized product stage between 1968 and 1972. With the arrival of the standardized state it is noted that the industry has become less competitive.