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Entrepreneurial Firms: With Whom Do They Compete, and Where?

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  • Marc Cowling

    (University of Derby)

  • Simon Peter Nadeem

    (University of Derby)

Abstract

Many different theories that have attempted to explain why smaller entrepreneurial firms exist. Surprisingly, very little empirical work has tested the obvious questions, such as: Are small firm’s price-takers in highly competitive markets? Who do they compete against? What if they try to raise prices? Does innovation offer niche market protection? Using a large UK data set our key findings are that less than 5% of entrepreneurial firms operate in markets where they effectively have no competition and a quarter of all small firms would lose at least a third of their sales if they raised prices by 10%.

Suggested Citation

  • Marc Cowling & Simon Peter Nadeem, 2020. "Entrepreneurial Firms: With Whom Do They Compete, and Where?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(3), pages 559-577, November.
    • Handle: RePEc:kap:revind:v:57:y:2020:i:3:d:10.1007_s11151-020-09782-y
    DOI: 10.1007/s11151-020-09782-y
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    Cited by:

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    2. Alex Coad, 2022. "Lumps, Bumps and Jumps in the Firm Growth Process," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 18(4), pages 212-267, April.
    3. Bernadette Power & Gavin C. Reid, 2023. "Lifting the hood of supply and demand for trademarks of start‐ups: Partial observability estimates," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 311-321, January.

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