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:: Volume 25, Number 82 (quartery journal of Economic Research and Policies 2017) ::
3 2017, 25(82): 79-110 Back to browse issues page
Entry and Exit of Firms and Assessing Barriers to Entry in the Industry Sector
Abstract:   (197 Views)
Free entry and exit can increase the competition into a market. According to economic theories, it is expected that with increasing the entry barrier and decreasing the number of firms in the market, the monopoly degree increases in industrial markets. One of the structural components in the market is the entry barrier. The reason for the importance of entry barrier issue is that the existence of a barrier to entry (and also reactions of the existing firms into the market) can prevent from entering the new entrant in the market and leads the structure of the market to converge to monopoly. In this paper, in order to evaluate the entry barrier in Iranian industry sectors, we calculate Cost Disadvantage Ratio (CDR) index and the net entry rate. Moreover, this paper investigates effective factors on the net entry. The findings indicate the CDR index in the two-digit ISIC code industries is less than 1. The net entry rate is also negative in most of the industries, which imply a high barrier to entry in the industry. Results show the intensity of concentration, advertising intensity, research and development costs, returns and economies of scale also have significant and negative effects on net entry rate in Iranian industrial markets.
 
Keywords: : Barrier to Entry, Market structure, Ratio of cost disadvantages, Net Entry
Full-Text [PDF 1088 kb]   (84 Downloads)    
Type of Study: Research | Subject: Special
Received: 2017/09/10 | Accepted: 2017/09/10 | Published: 2017/09/10
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Entry and Exit of Firms and Assessing Barriers to Entry in the Industry Sector . 3. 2017; 25 (82) :79-110
URL: http://qjerp.ir/article-1-1873-en.html
Volume 25, Number 82 (quartery journal of Economic Research and Policies 2017) Back to browse issues page
فصلنامه پژوهشها و سیاستهای اقتصادی Journal of Economic Research and Policies
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