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The dynamics of entry and exit in turkish manufacturing industry

  • Secil Kaya

    ()

    (Department of Economics, METU)

  • Yesim Üçdogruk

    ()

    (Department of Economics, METU)

Registered author(s):

    Entry 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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    File URL: http://www.erc.metu.edu.tr/menu/series02/0202.pdf
    File Function: First version, 2002
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    Paper provided by ERC - Economic Research Center, Middle East Technical University in its series ERC Working Papers with number 0202.

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    Length: 33 pages
    Date of creation: Feb 2002
    Date of revision: Feb 2002
    Handle: RePEc:met:wpaper:0202
    Contact details of provider: Postal: Ankara 06531
    Phone: +90 (312) 210 2003
    Fax: (312) 210 1244
    Web page: http://www.erc.metu.edu.tr
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    1. Carree, M. A. & Thurik, A. R., 1999. "The carrying capacity and entry and exit flows in retailing," International Journal of Industrial Organization, Elsevier, vol. 17(7), pages 985-1007, October.
    2. Fotopoulos, Georgios & Spence, Nigel, 1999. "Net entry behaviour in Greek manufacturing: consumer, intermediate and capital goods industries," International Journal of Industrial Organization, Elsevier, vol. 17(8), pages 1219-1230, November.
    3. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
    4. Shapiro, Daniel & Khemani, R. S., 1987. "The determinants of entry and exit reconsidered," International Journal of Industrial Organization, Elsevier, vol. 5(1), pages 15-26, March.
    5. Gibson, John K & Harris, Richard I D, 1996. "Trade Liberalisation and Plant Exit in New Zealand Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 521-29, August.
    6. Pekka Ilmakunnas & Jukka Topi, 1999. "Microeconomic and Macroeconomic Influences on Entry and Exit of Firms," Review of Industrial Organization, Springer, vol. 15(3), pages 283-301, November.
    7. Boeri, Tito & Bellmann, Lutz, 1995. "Post-entry behaviour and the cycle: Evidence from Germany," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 483-500, December.
    8. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Entry, Exit and Establishment Survival in UK Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 91-112, 03.
    9. Fotopoulos, Georgios & Spence, Nigel, 1998. " Accounting for Net Entry into Greek Manufacturing by Establishments of Varying Size," Small Business Economics, Springer, vol. 11(2), pages 125-44, September.
    10. Acs, Zoltan J & Audretsch, David B, 1989. "Small-Firm Entry in U.S. Manufacturing," Economica, London School of Economics and Political Science, vol. 56(222), pages 255-65, May.
    11. Audretsch, David B. & Mata, Jose, 1995. "The post-entry performance of firms: Introduction," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 413-419, December.
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