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Do entry barriers reduce productivity? Evidence from a natural experiment

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  • McGowan, Danny

Abstract

I study how entry barriers affect productivity by exploiting the collapse of the US sugar cartel as a natural experiment. Using difference-in-difference estimations, I find the eradication of entry barriers caused a 35% increase in productivity within the treatment group.

Suggested Citation

  • McGowan, Danny, 2014. "Do entry barriers reduce productivity? Evidence from a natural experiment," Economics Letters, Elsevier, vol. 125(1), pages 97-100.
    • Handle: RePEc:eee:ecolet:v:125:y:2014:i:1:p:97-100
    DOI: 10.1016/j.econlet.2014.08.014
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    References listed on IDEAS

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    1. Austan Goolsbee & Chad Syverson, 2008. "How Do Incumbents Respond to the Threat of Entry? Evidence from the Major Airlines," The Quarterly Journal of Economics, Oxford University Press, vol. 123(4), pages 1611-1633.
    2. Fabiano Schivardi & Eliana Viviano, 2011. "Entry Barriers in Retail Trade," Economic Journal, Royal Economic Society, vol. 121(551), pages 145-170, March.
    3. Philippe Aghion & Richard Blundell & Rachel Griffith & Peter Howitt & Susanne Prantl, 2009. "The Effects of Entry on Incumbent Innovation and Productivity," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 20-32, February.
    4. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    5. Butler, Alexander W. & Cornaggia, Jess, 2011. "Does access to external finance improve productivity? Evidence from a natural experiment," Journal of Financial Economics, Elsevier, vol. 99(1), pages 184-203, January.
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    Cited by:

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    2. Ronald R. Kumar & Peter J. Stauvermann, 2020. "Economic and Social Sustainability: The Influence of Oligopolies on Inequality and Growth," Sustainability, MDPI, vol. 12(22), pages 1-23, November.

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    More about this item

    Keywords

    Entry barriers; Productivity;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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