IDEAS home Printed from https://ideas.repec.org/p/hhs/iuiwop/0262.html
   My bibliography  Save this paper

Deregulation, Innovative Entry and Structural Diversity as a Source of Stable and Rapid Economic Growth

Author

Listed:
  • Eliasson, Gunnar

    (Research Institute of Industrial Economics (IFN))

Abstract

The importance of free innovative entry (deregulation) for diversity of structure and competition is studied. I demonstrate quantitatively that even with a narrow definition of entry (firms), and given observed entry behavior, successful entrants completely dominate the long run performance characteristics of the economy. Rapid and stable long-run macro-economic growth can only be achieved if innovative competitive entry is vigorous. Free access to markets is a necessary condition, competence a sufficient condition. It is probably wrong to believe that the (ex ante) threat of entry is sufficient for dynamic competition. A growing economy requires a steady showering with optimistic entrants, a few of which tum out ex post to be superior performers. Failing and exiting firms are part of the innovation costs to society for steady and rapid economic growth. The benefits of financial innovations like junk bonds are to reduce barriers to competitive entry to make both successes and failures possible.

Suggested Citation

  • Eliasson, Gunnar, 1990. "Deregulation, Innovative Entry and Structural Diversity as a Source of Stable and Rapid Economic Growth," Working Paper Series 262, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:0262
    as

    Download full text from publisher

    File URL: https://www.ifn.se/wfiles/wp/wp262.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Economic growth; Deregulation; Structural diversity;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - 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:hhs:iuiwop:0262. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Elisabeth Gustafsson (email available below). General contact details of provider: https://edirc.repec.org/data/iuiiise.html .

    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.