TY - JOUR
T1 - The dynamics of entry, exit and profitability
T2 - An error correction approach for the retail industry
AU - Carree, Martin
AU - Thurik, Roy
PY - 1994/4
Y1 - 1994/4
N2 - We develop a two equation error correction model to investigate determinants of and dynamic interaction between changes in profits and number of firms in retailing. An explicit distinction is made between the effects of actual competition among incumbants, new firms competition and potential competition from firms outside the market. Effects of cost, demand and general income changes on profitability are investigated to gain insight in the role of retailing in the cost, demand and wage inflationary processes. The relative importance of profitability, growth and unemployment as determinants of net entry are studied. The model is tested using a panel data set of 36 Dutch shoptypes covering the 1977-1988 period.
AB - We develop a two equation error correction model to investigate determinants of and dynamic interaction between changes in profits and number of firms in retailing. An explicit distinction is made between the effects of actual competition among incumbants, new firms competition and potential competition from firms outside the market. Effects of cost, demand and general income changes on profitability are investigated to gain insight in the role of retailing in the cost, demand and wage inflationary processes. The relative importance of profitability, growth and unemployment as determinants of net entry are studied. The model is tested using a panel data set of 36 Dutch shoptypes covering the 1977-1988 period.
U2 - 10.1007/BF01065183
DO - 10.1007/BF01065183
M3 - Article
SN - 0921-898X
VL - 6
SP - 107
EP - 116
JO - Small Business Economics
JF - Small Business Economics
ER -