Barriers to Entry and Profitability


Heger, Diana ; Kraft, Kornelius


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URL: http://ub-madoc.bib.uni-mannheim.de/2106
URN: urn:nbn:de:bsz:180-madoc-21062
Document Type: Working paper
Year of publication: 2008
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: L13 L25 C25 ,
Subject headings (SWD): Deutschland , Latente Konkurrenz , Marktzugang , Preispolitik , Marktstruktur , Fixe Kosten , Verarbeitendes Gewerbe
Keywords (English): Barriers to Entry , Profitability , Discrete Regression Models
Abstract: Barriers to entry are regarded as major impediments to the working of markets. Entry must not necessarily actually take place - the perceived threat of entry may encourage incumbent firms to behave as if they are in a competitive market, even if they are not. We present empirical evidence on effects of perceived threat of entry on profitability. Using information from managers about how they assess the existence of entry barriers a strong impact of these assessments on profitability is confirmed. The number and the relative size of competitors also exert considerable effects. We find no statistically significant relation between the perceived threat of entry and the actual number of firms if the size of the relevant market is taken into account.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Heger, Diana ; Kraft, Kornelius (2008) Barriers to Entry and Profitability. Open Access [Working paper]
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