IDEAS home Printed from https://ideas.repec.org/a/adr/anecst/y1989i15-16p333-353.html
   My bibliography  Save this article

The Effect of Entry on Profit Margins in the Short and Long Run

Author

Listed:
  • Paul A. Geroski

Abstract

This paper examines a dynamic feedback model of entry and profit margins, tracing the interactions between the two in the short and long run. Applied to a 6 year panel of data for 85 UK three digit industries during the period 1974-1979, the results suggest that entry responds positively to expected margins, but in a very noisy fashion. The short run dynamics of margins show signs consistent with the view that some entry pre-emption occurs. High margins return to long run equilibrium levels reasonably promptly, but actual flows of entry have only a modest effect on margins in the short run.

Suggested Citation

  • Paul A. Geroski, 1989. "The Effect of Entry on Profit Margins in the Short and Long Run," Annals of Economics and Statistics, GENES, issue 15-16, pages 333-353.
    • Handle: RePEc:adr:anecst:y:1989:i:15-16:p:333-353
    as

    Download full text from publisher

    File URL: http://www.jstor.org/stable/20075763
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ralph B. Siebert, 2019. "Estimating Differential Dynamic Merger Effects on Market Structure and Entry in Related Markets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(3), pages 431-458, November.
    2. Hackl, Franz & Kummer, Michael E. & Winter-Ebmer, Rudolf & Zulehner, Christine, 2014. "Market structure and market performance in E-commerce," European Economic Review, Elsevier, vol. 68(C), pages 199-218.
    3. Ricard Gil & Fernanda Gutierrez-Navratil, 2017. "Does Television Entry Decrease The Number Of Movie Theaters?," Economic Inquiry, Western Economic Association International, vol. 55(2), pages 736-756, April.
    4. Boone, Jan, 2004. "Balance of Power," CEPR Discussion Papers 4733, C.E.P.R. Discussion Papers.
    5. Boone, J., 2004. "Balance of Power," Other publications TiSEM d3f8cd4b-eaf0-4c1c-aed4-5, Tilburg University, School of Economics and Management.
    6. Sara Amoroso & Bettina Müller, 2018. "The short-run effects of knowledge intensive greenfield FDI on new domestic entry," The Journal of Technology Transfer, Springer, vol. 43(3), pages 815-836, June.
    7. Pazgal, Amit & Soberman, David & Thomadsen, Raphael, 2016. "Profit-increasing asymmetric entry," International Journal of Research in Marketing, Elsevier, vol. 33(1), pages 107-122.
    8. Boone, J., 2004. "Balance of power," Other publications TiSEM dcff47a3-8a29-4ec3-a752-8, Tilburg University, School of Economics and Management.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:adr:anecst:y:1989:i:15-16:p:333-353. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Secretariat General or Laurent Linnemer (email available below). General contact details of provider: https://edirc.repec.org/data/ensaefr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.