Topple Rate

DEFINITION of 'Topple Rate'

The rate at which the group of leading companies, whether in industries or in market indexes, changes over time. This phenomenon is usually attributed to increased global competition and technology, although the existence of a topple rate is generally considered a healthy part of an advanced economy.

BREAKING DOWN 'Topple Rate'

According to a study entitled "Extreme Competition" (2005), which appeared in The McKinsey Quarterly in 2005, the topple rate (as measured by membership in the S&P 500) doubled in the 20-year period from 1975-1995. This effect is especially prevalent in technology businesses because new cutting-edge technology is emerging continually.