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Market Structure in Transition: Entry and Competition in Slovakia

Author

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  • Martin Lábaj

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

  • Karol Morvay
  • Peter Silaniè
  • Christoph Weiss

Abstract

The present paper provides first empirical evidence on the relationship between market size and the number of firms 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. The empirical analysis is carried out for three time periods (1995, 2001 and 2010) characterizing different stages of the transition process. Our results suggest that the relationship between market size and the number of firm has changed substantially over time. While entry threshold ratios tend to be larger than one and decline with the number of firms in most professions in 1995, the estimation results obtained for 2010 suggest entry threshold ratios much closer to one. This finding is consistent with observations suggesting a significant decline in entry barriers as well as an intensification of competition over time.

Suggested Citation

  • Martin Lábaj & Karol Morvay & Peter Silaniè & Christoph Weiss, 2014. "Market Structure in Transition: Entry and Competition in Slovakia," Department of Economic Policy Working Paper Series 005, Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava.
    • Handle: RePEc:brt:depwps:005
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    References listed on IDEAS

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    More about this item

    Keywords

    entry thresholds; competition; Slovakia; transition; geographic markets;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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