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The determining factors of entry of new firms into industrial sectors: a survey

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Abstract

Entry is a common feature of all industries and it represents a key aspect to be studied in order to understand the dynamics that characterise the evolution of industrial sectors. It is the purpose of this paper to analyse the process of entry of firms into markets and the nature of the factors that could play a role in determining it and in shaping the evolution of market structures. Different fields of economic literature examine the dynamic process of entry of new firms. In this paper, we focus our attention on the differences that characterise these approaches: the traditional approach, the technological regime theory, the role of “competence-enhancing” and “competence-destroying” technological change, the industry life cycle theory, the role of information and uncertainty, the organisational ecology approach and the psychological view. We claim that the relationship of the entry processes with the evolution of market structures, then, can be deeply understood only if we take into account the distinctions and the complementarities offered by these views.

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Paper provided by Cattaneo University (LIUC) in its series LIUC Papers in Economics with number 144.

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Length: 42 pages
Date of creation: Mar 2004
Date of revision:
Handle: RePEc:liu:liucec:144

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