Entry and exit in retailing: Incentives, barriers, displacement and replacement

Martin Carree*, Roy Thurik

*Corresponding author for this work

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    In this study the determinants of entry and exit and the interrelationship between these market phenomena are investigated. We examine incentives, barriers, displacement and replacement for a panel data-set of 23 Dutch shoptypes for the 1981-1988 period. Results indicate that profit as a ratio of modal income, growth of consumer spending and growing unemployment are important incentives to enter and disincentives to exit. Requirements of floorspace and professional skills appear to reduce entry rates. We find evidence for entry and exit to interact but not to be simultaneously determined. The implication being that entry (exit) has a separate influence on exit (entry) next to market incentives and entry and exit barriers.
    Original languageEnglish
    Pages (from-to)155-172
    Number of pages18
    JournalReview of Industrial Organization
    Publication statusPublished - Apr 1996

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