Over 70 empirical studies of entry and exit patterns covering eleven different countries generally support the expectation that entry is more frequent in more profitable, rapidly growing industries, and slower where the absolute costs of capital required to build a minimum efficient scale plant are imposing. Scale economies, excess capacity, and limit pricing receive little empirical support as entry impediments. The evidence concerning the effects of advertising and R&D intensity is confusing. Exit is faster where profits are lower, and slower where durable specific (sunk) capital costs are more important. Exit and entry are strongly correlated, probably due to displacement (of incumbents by more efficient entrants) and vacuum effects (in which entrants are enticed by the prospects of selling to uncommitted customers abandoned by a recent exit).

Empirical studies of entry and exit: A survey of the evidence

Macro-level determinants of formal entrepreneurship versus informal entrepreneurship

Empirical Studies of Entry and Exit: A Survey of

Introduction Defining Entrepreneurship Measuring Entrepreneurship Comparisons and Discussion. Conclusions References Appendix

/pdf/defining-and-measuring-entrepreneurship-k7ehlv6dht.pdf

Defining and Measuring Entrepreneurship

This paper is an exploratory analysis of the role that banks play in supporting what Jevons called the "mechanism of exchange." It considers a model economy in which exchange activities are facilitated and coordinated by a self-organizing network of entrepreneurial trading firms. Collectively, these firms play the part of the Walrasian auctioneer, matching buyers with sellers and helping the economy to approximate equilibrium prices that no individual is able to calculate. Banks affect macroeconomic performance in this economy because their lending activities facilitate the entry and influence the exit decisions of trading firms. Both entry and exit have ambiguous effects on performance, and we resort to computational analysis to understand how they are resolved. Our analysis draws an important distinction between normal times and worst-case scenarios, in which the economy experiences systemic breakdowns. We show that banks provide a "financial stabilizer" that more than counteracts the familiar financial accelerator and that the stabilizing role of the banking system is particularly apparent in bad times. In line with this result, we also find that under less restrictive lending standards banks are able to more effectively improve macroeconomic performance in the worst-case scenarios.

Banks, Market Organization, and Macroeconomic Performance: An Agent-Based Computational Analysis

Entry and exit rates are examined across a fairly large sample of 4-digit U.S. manufacturing industries. Market growth significantly increases (reduces) entry (exit) rates. Profits increase entry rates. Advertising clearly acts as an entry barrier. Sunk capital costs seem to deter exit. While entry and exit rates are related in the sample, whether they are simultaneously determined is unclear.

The determinants of entry and exit rates into U.S. manufacturing industries

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The determinants of entry and exit rates into U.S. manufacturing industries