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Entry and Competition in a Transition Economy: The Case of Slovakia

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Author Info

  • Martin Lábaj

    ()
    (University of Economics in Bratislava, Faculty of National Economy, Department of Economic Policy)

  • Peter Silaniè

    ()
    (University of Economics in Bratislava, Faculty of National Economy, Department of Economic Policy)

  • Christoph Weiss

Abstract

The present paper provides first empirical evidence on the effects of entry on market conduct for a transition economy. We estimate size thresholds required to support different numbers of firms for seven retail and professional service industries in a large number of distinct geographic markets in Slovakia. Our results suggest a differential impact of entry on market conduct: while market conduct is unaffected by entry in the north-western parts of Slovakia, competition tends to kick in slowly in most professions in the south-east. This latter region suffers from infrastructure bottlenecks and competitors require a larger increase in the number of customers to come in.

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Bibliographic Info

Paper provided by Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava in its series Department of Economic Policy Working Paper Series with number 003.

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Length: 17 pages
Date of creation: 31 Jan 2013
Date of revision:
Handle: RePEc:brt:depwps:003

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Keywords: entry thresholds; competition; Slovakia; cross section; geographic markets;

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  1. Bresnahan, T.F & Reiss, P.C., 1989. "Entry And Competition In Concentrated Markets," Papers 151, Stanford - Studies in Industry Economics.
  2. Schaumans, C.B.C. & Verboven, F.L., 2011. "Entry and Competition in Differentiated Products Markets," Discussion Paper 2011-049, Tilburg University, Center for Economic Research.
  3. Stefan Bojnec & Ana Xavier, 2004. "Entry and exit in transition economies: the Slovenian manufacturing sector," Post-Communist Economies, Taylor & Francis Journals, vol. 16(2), pages 191-214.
  4. Saul Estrin, 2002. "Competition and Corporate Governance in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 101-124, Winter.
  5. Barbara Roberts & Steve Thompson, 2003. "Entry and Exit in a Transition Economy: The Case of Poland," Review of Industrial Organization, Springer, vol. 22(3), pages 225-243, May.
  6. Asplund, Marcus & Sandin, Rickard, 1999. "The Number of Firms and Production Capacity in Relation to Market Size," Journal of Industrial Economics, Wiley Blackwell, vol. 47(1), pages 69-85, March.
  7. Mariusz Jarmuzek & Biswajit Banerjee, 2009. "Anatomy of Regional Disparities in the Slovak Republic," IMF Working Papers 09/145, International Monetary Fund.
  8. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
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