Entry, Exit, and the Endogenous Market Structure in Technologically Turbulent Industries

34 Pages Posted: 5 Jan 2011  

Myong-Hun Chang

Cleveland State University - Economics

Multiple version iconThere are 2 versions of this paper

Date Written: 2011

Abstract

Empirical studies have found high correlation between entry and exit across industries, indicating that industries differ substantially in their degree of firm turnover. I propose a computational model of dynamic oligopoly with entry and exit in a turbulent technological environment. I examine how industry-specific factors give rise to across-industries differences in turnover. An analysis of the endogenous relationships between firm turnover, industry concentration, and the performance variables shows: (1) the rate of turnover and industry concentration are positively related; (2) industry concentration and market price are positively related; (3) no general relationship exists between industry concentration and price-cost margin.

Suggested Citation

Chang, Myong-Hun, Entry, Exit, and the Endogenous Market Structure in Technologically Turbulent Industries (2011). Eastern Economic Journal, Vol. 37, Issue 1, pp. 51-84, 2011. Available at SSRN: https://ssrn.com/abstract=1735196 or http://dx.doi.org/10.1057/eej.2010.55

Myong-Hun Chang (Contact Author)

Cleveland State University - Economics ( email )

Cleveland, OH
United States

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