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Entry Thresholds and Actual Entry and Exit in Local Markets

Author

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  • Martin Carree

    (Faculty of Economics and Business Administration - Maastricht University [Maastricht])

  • Marcus Dejardin

    (Faculté des Sciences économiques, sociales et de gestion, FUNDP - FUNDP - Facultés Universitaires Notre Dame de la Paix)

Abstract

Bresnahan and Reiss (1991) derive entry thresholds for local markets but do not investigate actual entry and exit flows. This paper investigates for thirteen Belgian retail and consumer service industries whether markets with actual numbers of firms higher (lower) than the thresholds display exit (entry) in subsequent periods. The results confirm that over a three-year period the rate of (net) entry is positively affected by the presence of ‘market room'. The exit rate, however, does not show a negative relation with ‘market room'.

Suggested Citation

  • Martin Carree & Marcus Dejardin, 2007. "Entry Thresholds and Actual Entry and Exit in Local Markets," Post-Print halshs-00144832, HAL.
    • Handle: RePEc:hal:journl:halshs-00144832
    DOI: 10.1007/s11187-006-6860-9
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    References listed on IDEAS

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    Cited by:

    1. Martin Lábaj & Karol Morvay & Peter Silanič & Christoph Weiss & Biliana Yontcheva, 2018. "Market structure and competition in transition: results from a spatial analysis," Applied Economics, Taylor & Francis Journals, vol. 50(15), pages 1694-1715, March.
    2. Thomas Gries & Wim Naudé, 2008. "Entrepreneurship and Regional Economic Growth: Towards A General Theory of Start-Ups," WIDER Working Paper Series RP2008-70, World Institute for Development Economic Research (UNU-WIDER).
    3. Kathleen Cleeren & Frank Verboven & Marnik G. Dekimpe & Katrijn Gielens, 2010. "Intra- and Interformat Competition Among Discounters and Supermarkets," Marketing Science, INFORMS, vol. 29(3), pages 456-473, 05-06.
    4. Rui Baptista & Murat Karaöz, 2011. "Turbulence in growing and declining industries," Small Business Economics, Springer, vol. 36(3), pages 249-270, April.
    5. Kesternich, Iris & Schumacher, Heiner & Van Biesebroeck, Johannes & Grant, Iris, 2020. "Market size and competition: A “hump-shaped” result," International Journal of Industrial Organization, Elsevier, vol. 70(C).
    6. Marcus Dejardin & Martin Carree, 2011. "Firm Entry and Exit in Local Markets: Market Pull and Unemployment Push," Working Papers 1114, University of Namur, Department of Economics.
    7. Dawn DeTienne & Melissa Cardon, 2012. "Impact of founder experience on exit intentions," Small Business Economics, Springer, vol. 38(4), pages 351-374, May.
    8. Martin Carree & Marcus Dejardin, 2020. "Firm Entry and Exit in Local Markets: 'Market Pull' or 'Unemployment Push' Effects, or Both?," Post-Print halshs-03220690, HAL.

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    More about this item

    Keywords

    Entry; exit; entry thresholds; ordered probit;
    All these keywords.

    JEL classification:

    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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