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Determinants of Entry: A Study of Leading U.S. Supermarket Chain Entry Patterns

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  • Ronald W. Cotterill
  • Lawrence E. Haller
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    Abstract

    De novo entry by the top 20 U.S. supermarket chains into local markets is examined using Tobit analysis. We find that entry is related to potential entrants' proximity to the local market, market growth, concentration, the number of large chains that are incumbents in the local market, and the competency of potential entrants as measured by their recent internal expansion rate. With regard to competing theories that relate strategic entry barriers to entry patterns, different components of the analysis provide support for different hypotheses. However, the most general model provides little support for the contestability or Chicago efficiency rent hypotheses.

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    File URL: http://fmpc.uconn.edu/publications/rr/rr11.pdf
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    Bibliographic Info

    Paper provided by University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy in its series Food Marketing Policy Center Research Reports with number 011.

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    Date of creation: 1991
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    Handle: RePEc:zwi:fpcrep:011

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    Keywords: Agribusiness; Industrial Organization;

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