IDEAS home Printed from https://ideas.repec.org/a/kap/sbusec/v16y2001i1p21-30.html
   My bibliography  Save this article

The New Industrial Organization and Small Business

Author

Listed:
  • Kwoka, John E, Jr
  • White, Lawrence J

Abstract

The small business sector is an important part of the American economic landscape, in both absolute and relative terms. Despite its absolute growth, however, the sector accounts for a diminishing share of private sector activity. But its importance, and changes in importance, vary across industrial sectors of the economy. Drawing on the theoretical and empirical insights developed in recent books by John Sutton, we suggest that the presence or absence of endogenous strategic behaviors of the larger firms with respect to advertising, promotion, research and development, and other sunk cost expenditures may well play an important role in explaining the differing levels of small business importance, both cross-sectionally and over time. We conclude the paper with suggestions for research directions that could shed further light on these ideas. Copyright 2001 by Kluwer Academic Publishers

Suggested Citation

  • Kwoka, John E, Jr & White, Lawrence J, 2001. "The New Industrial Organization and Small Business," Small Business Economics, Springer, vol. 16(1), pages 21-30, February.
    • Handle: RePEc:kap:sbusec:v:16:y:2001:i:1:p:21-30
    as

    Download full text from publisher

    File URL: http://journals.kluweronline.com/issn/0921-898X/contents
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Salop, Steven C & Scheffman, David T, 1983. "Raising Rivals' Costs," American Economic Review, American Economic Association, vol. 73(2), pages 267-271, May.
    2. Timothy F. Bresnahan & Shane Greenstein, 1999. "Technological Competition and the Structure of the Computer Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 47(1), pages 1-40, March.
    3. Salop, Steven C & Scheffman, David T, 1987. "Cost-Raising Strategies," Journal of Industrial Economics, Wiley Blackwell, vol. 36(1), pages 19-34, September.
    4. Schmalensee, Richard, 1992. "Sunk Costs and Market Structure: A Review Article," Journal of Industrial Economics, Wiley Blackwell, vol. 40(2), pages 125-134, June.
    5. White, Lawrence J, 1982. "The Determinants of the Relative Importance of Small Business," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 42-49, February.
    6. Zoltan Acs & David Audretsch, 1990. "Innovation and Small Firms," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011131, December.
    7. Timothy F. Bresnahan, 1992. "Sutton's Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 137-152, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lawrence J. White, 2002. "What's Been Happening To Aggregate Concentration in the United States? (And Should We Care?)," Working Papers 02-03, New York University, Leonard N. Stern School of Business, Department of Economics.
    2. Joost van Acht & Joop Stam & Roy Thurik & Ingrid Verheul, 2004. "Business Ownership and Unemployment in Japan," Papers on Entrepreneurship, Growth and Public Policy 2004-09, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    3. Ioannis Kessides & Li Tang, 2010. "Sunk Costs, Market Contestability, and the Size Distribution of Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 37(3), pages 215-236, November.
    4. Lawrence J. White, 2002. "Trends in Aggregate Concentration in the United States," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 137-160, Fall.
    5. Alfaro, Martín, 2020. "Market structures in small open economies: Evidence from Denmark," Research in Economics, Elsevier, vol. 74(4), pages 363-378.
    6. Hinson, Roger A. & Sinoha, Ramona & Reaves, Dixie Watts, 2006. "Industry Concentration Impacts on Business Strategies Used by Small Produce Wholesalers," 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida 35291, Southern Agricultural Economics Association.
    7. Alfaro, Martin & Warzynski, Frederic, 2021. "Trade liberalization with granular firms," Economic Modelling, Elsevier, vol. 105(C).
    8. Maryanchyk Ivan, "undated". "Market Structure and Profitability in a Transition Economy: Ukrainian Case," EERC Working Paper Series 03-06e, EERC Research Network, Russia and CIS.
    9. David Audretsch & Roy Thurik, 2004. "A Model of the Entrepreneurial Economy," Papers on Entrepreneurship, Growth and Public Policy 2004-12, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    10. Rui Baptista & Roy Thurik, 2004. "The Relationship between Entrepreneurship and Unemployment: is Portugal an Outlier?," Papers on Entrepreneurship, Growth and Public Policy 2004-40, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    11. Roy Thurik, 2003. "Entrepreneurship and Unemployment in the UK," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(3), pages 264-290, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, September.
    2. Donna, Javier D. & Pereira, Pedro & Trindade, Andre & Yoshida, Renan C., 2020. "Direct-to-Consumer Sales by Manufacturers and Bargaining," MPRA Paper 105773, University Library of Munich, Germany.
    3. Barbara J. Spencer & Ronald W. Jones, 1991. "Vertical Foreclosure and International Trade Policy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(1), pages 153-170.
    4. Jean J. Gabszewicz & Skerdilajda Zanaj, 2008. "Upstream Market Foreclosure," Bulletin of Economic Research, Wiley Blackwell, vol. 60(1), pages 13-26, January.
    5. Josep-Maria Arauzo-Carod & Agustí Segarra-Blasco, 2005. "The Determinants of Entry are not Independent of Start-up Size: Some Evidence from Spanish Manufacturing," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 27(2), pages 147-165, September.
    6. Marcel Canoy & Patrick Rey & Eric van Damme, 2004. "Dominance and Monopolization," Chapters, in: Manfred Neumann & Jürgen Weigand (ed.), The International Handbook of Competition, chapter 7, Edward Elgar Publishing.
    7. Emmanuel Petrakis & Minas Vlassis, 1999. "The strategic role of minimum sectorial wages in oligopoly: a case for the Spanish labour market," Investigaciones Economicas, Fundación SEPI, vol. 23(3), pages 331-350, September.
    8. Karbowski, Adam, 2019. "Greed and fear in downstream R&D games," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 32, pages 63-76.
    9. Kabiraj, Tarun & Sinha, Uday Bhanu, 2016. "Strategic outsourcing with technology transfer under price competition," International Review of Economics & Finance, Elsevier, vol. 44(C), pages 281-290.
    10. Sartzetakis, Eftichios S., 1994. "Permis d’émission négociables et réglementation dans des marchés de concurrence imparfaite," L'Actualité Economique, Société Canadienne de Science Economique, vol. 70(2), pages 139-158, juin.
    11. Kruse, Hendrik W. & Martínez-Zarzoso, Inma & Baghdadi, Leila, 2021. "Standards and political connections: Evidence from Tunisia," Journal of Development Economics, Elsevier, vol. 153(C).
    12. William P. Rogerson, 2021. "The Upstream Pass-Through Rate, Bargaining Power and the Magnitude of the Raising Rivals’ Costs (RRC) Effect," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 205-227, September.
    13. Roberto Hernán González & Praveen Kujal, 2012. "Vertical integration, market foreclosure and quality investment," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 11(1), pages 1-20, April.
    14. Krishnendu Ghosh DASTIDAR & YANO Makoto, 2017. "In many emerging economies corruption, poor quality of information and poor governance lead to restricted entry. In this paper we analyze the determinants of the .height.of entry barrier in a developi," Discussion papers 17010, Research Institute of Economy, Trade and Industry (RIETI).
    15. Ronald Bachmann & Thomas K. Bauer & Hanna Frings, 2014. "Minimum Wages as a Barrier to Entry: Evidence from Germany," LABOUR, CEIS, vol. 28(3), pages 338-357, September.
    16. Simshauser, Paul & Tian, Yuan & Whish-Wilson, Patrick, 2015. "Vertical integration in energy-only electricity markets," Economic Analysis and Policy, Elsevier, vol. 48(C), pages 35-56.
    17. Author One David Harbord & Author Two Marco Ottaviani, 2002. "Anticompetitive Contracts in the U.K. Pay-TV Market," Industrial Organization 0203002, University Library of Munich, Germany.
    18. Alfonso Gambardella & Eric von Hippel, 2019. "Open Sourcing as a Profit-Maximizing Strategy for Downstream Firms," Strategy Science, INFORMS, vol. 4(1), pages 41-57, March.
    19. Yen-Ju Lin & Yan-Shu Lin & Kuang-I Tu, 2016. "Strategic input outsourcing and equilibrium location choice," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 83-99, January.
    20. Roy, Santanu & Viaene, Jean-Marie, 1998. "On strategic vertical foreign investment," Journal of International Economics, Elsevier, vol. 46(2), pages 253-279, December.

    More about this item

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:sbusec:v:16:y:2001:i:1:p:21-30. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.