The dynamics of entry and exit in turkish manufacturing industry
AbstractEntry and exit are crucial elements of market selection process which leads to the restructuring, adaptation and evolution of an industry. While the importance of entry and exit has been recognised, attention has focused almost exclusively on quantifying barriers to them, rather than on investigating the determinants of entry and exit and measuring the magnitude of these processes. This paper analyses the entry and exit dynamics of Turkish manufacturing industry defined at the 4-digit ISIC level for the period 1981-1997. While, on the one hand, inflation targeting focuses on the determinants of entry and exit and their sectoral variation, on the other hand, inflation targeting verifies the link between entry and exit. This paper employs a dynamic panel data estimation procedure to investigate the relationship between entry and exit and to estimate the models of entry and exit. Our empirical findings suggest that rates of entry and exit are determined by profit margin, growth rate of output, concentration ratio, labor productivity, average wage rate, advertisement intensity, capital intensity and wage and productivity differentials as explanatory variables.
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Bibliographic InfoPaper provided by ERC - Economic Research Center, Middle East Technical University in its series ERC Working Papers with number 0202.
Length: 33 pages
Date of creation: Feb 2002
Date of revision: Feb 2002
Industrial dynamics; entry; exit; manufacturing; dynamic panel data;
Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
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