What is a Barrier to Entry?

McAfee, R. Preston; Mialon, Hugo M.; Williams, Michael A.

doi:10.2139/ssrn.594601

Cited by 67 publications

(64 citation statements)

References 8 publications

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“…Bain 1956;Stigler 1968;Von Weizsacker 1980;McAfee et al 2004) and the strategic management perspective (e.g. Porter 1980Porter , 1985Singh et al 1998;Robinson and McDougall 2001).…”

Section: Literature Reviewmentioning

confidence: 99%

“…It may be argued that these high values result from the medium factor loadings (between 0.21 and 0.48) on several factors (capital, distribution, advertising, strategic action and product differentiation). McAfee et al (2004) called these types of barriers ''ancillary barriers''. They do not constitute barriers in themselves, but reinforce other barriers to entry if they are present.…”

Section: The Underlying Dimensions Of Barriers To Entrymentioning

confidence: 99%

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Perceptions regarding strategic and structural entry barriers

2009

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This article uses factor analysis to identify the underlying dimensions of strategic and structural entry barriers. We find that, in the perception of firms, both types of barriers are important and that the effectiveness of strategic barriers depends on attributes of the market structure. Based on the seven generic factors, a conjoint analysis is carried out to identify the most important factors perceived by firms. The conjoint analysis shows that in particular the barriers rooted in three underlying dimensions require attention of market authorities as they may prevent new entrants from entry: capital, access to distribution channels and strategic action. Remarkably, government rules and regulations, product differentiation, research and development (R&D) and advertising constitute minor entry problems according to firms.

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“…Bain 1956;Stigler 1968;Von Weizsacker 1980;McAfee et al 2004) and the strategic management perspective (e.g. Porter 1980Porter , 1985Singh et al 1998;Robinson and McDougall 2001).…”

Section: Literature Reviewmentioning

confidence: 99%

Section: The Underlying Dimensions Of Barriers To Entrymentioning

confidence: 99%

Perceptions regarding strategic and structural entry barriers

2009

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“…Various definitions of barriers to entry have been proposed in the industrial organization literature, as the ones by Bain (1956), Stigler (1968), Ferguson (1974), Caves & Porter (1977), Fisher (1979), VonWeizsacker (1980), Demsetz (1982, Baumol & Willig (1981), Gilbert (1989), Geroski et al (1990), Carlton & Perloff (1994, Church & Ware (2000), McAfee et al (2004) and the OECD (2005).…”

Section: Entry and Barriers To Entrymentioning

confidence: 99%

The Effect of Research & Development Investments on New Firm Entry

Kotsios¹,

Gkampoura²,

Kotsios³

2015

RWE

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The entry of new competitors operates as a balancing force against high levels of industrial concentration and the abuse of dominant position by firms with large market shares. This paper's goal is to examine theoretically the impact of Research & Development investments on new firm entry. While dominant economic theory supports that large R&D investments are a prerequisite for technological change and economic growth, so that large incumbent firms are considered to have an advantage against new, typically smaller firms, theoretical and empirical research has shown that this may not be the case. Small firms' contribution in innovation and economic development is far greater than expected.

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“…These papers point to current demand as the key determinant of the number of firms: A market will attain N firms if N entrants can recover their fixed costs but N + 1 entrants cannot. These authors emphasize that the observed relationship between C and N depends on the rate at which π(N ) decreases (which Sutton, 1991, labeled the "toughness of competition") and the rate at which ϕ(N ) increases (which McAfee et al, 2004, define to be an economic barrier to entry). If both of these functions are constant, then the number of active firms is roughly proportional to demand, C j = j×C 1 .…”

Section: Entry and Exit With Uncertaintymentioning

confidence: 99%

Last-In First-Out Oligopoly Dynamics

Abbring

Campbell

2010

Econometrica

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This paper extends the static analysis of oligopoly structure into an infinite-horizon setting with sunk costs and demand uncertainty. The observation that exit rates decline with firm age motivates the assumption of last-in first-out dynamics: An entrant expects to produce no longer than any incumbent. This selects an essentially unique Markov-perfect equilibrium. With mild restrictions on the demand shocks, a sequence of thresholds describes firms' equilibrium entry and survival decisions. Bresnahan and Reiss's (1993) empirical analysis of oligopolists' entry and exit assumes that such thresholds govern the evolution of the number of competitors. Our analysis provides an infinite-horizon game-theoretic foundation for that structure.

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What is a Barrier to Entry?

Cited by 67 publications

References 8 publications

Perceptions regarding strategic and structural entry barriers

Perceptions regarding strategic and structural entry barriers

The Effect of Research & Development Investments on New Firm Entry

Last-In First-Out Oligopoly Dynamics

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