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Market Structure and Entry: Evidence from the intermediate goods market

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  • Shuhei NISHITATENO

Abstract

The question of whether incumbent firms could deter new entrants in a more concentrated market has been a major concern by both antitrust authorities and industrial economists. This study is the first attempt to analyze the relationship between the market structure and entry in the intermediate goods market, utilizing unique data on auto parts transactions between automakers and auto parts suppliers in Japan during the period 1990-2010. The results suggest that there exists a U-shaped relationship between market concentration and entry, which sees entry decreasing and then increasing as markets concentrate. This result could emanate from a significant role of multi-product and multi-customer firms.

Suggested Citation

  • Shuhei NISHITATENO, 2015. "Market Structure and Entry: Evidence from the intermediate goods market," Discussion papers 15081, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:15081
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    References listed on IDEAS

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    Cited by:

    1. Francesca Di Iorio & Maria Letizia Giorgetti, 2018. "The impact of submarket concentration in the US pharmaceutical industry in 1987-1998," DEM Working Papers Series 163, University of Pavia, Department of Economics and Management.

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