Profit, entry and changes in concentration

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Abstract

The simultaneity between profit, entry, and changes in concentration is examined. The sample includes 481 observations on 4-digit industries over the years 1972-1977 and 1977-1982. Results show that profits respond positively to entry barriers and initial concentration. Net entry responds positively to initial profits and responds negatively to entry barriers. Concentration moves toward its steady-state level, but the rate of adjustment is very slow. The competitive process, left on its own, does not seem to move quickly toward equilibrium.

Original languageEnglish (US)
Pages (from-to)185-203
Number of pages19
JournalInternational Journal of Industrial Organization
Volume11
Issue number2
DOIs
Publication statusPublished - Jun 1993

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ASJC Scopus subject areas

  • Industrial relations
  • Aerospace Engineering
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management
  • Industrial and Manufacturing Engineering

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