Portuguese manufacturing industry: determinants of new firm entry

Authors

  • Georgette Andraz ESGHT/University of the Algarve
  • J. Sant’ana Fernandes
  • Cristina Gonçalves
  • J. Rodrigo Guerreiro

Keywords:

firm dynamics, entry, exit, manufacturing industry, barriers to entry and exit

Abstract

The main purpose of this study is to investigate the determinants of new firm entry in the Portuguese manufacturing industries over the period 1996-2007. Estimation results generally confirm previous studies findings (see, e.g. Fotopoulos & Spence, 1998; Nystrom, 2007). Our findings indicate that market size and past macroeconomic conditions are important determinants of entry rates. Results also indicate a significant positive effect of past exit on actual entry. It is also found evidence of low barriers to new entry which associated with high firm turnover suggests companies’ inability to compete in the market, mainly due to difficulties in raising capital for required investments to operate efficiently. Results also reveal evidence of an inversed “U” shaped relationship between industry profit and entry. This result brings new line of investigation in the empirical literature on industry dynamics

Author Biography

  • Georgette Andraz, ESGHT/University of the Algarve
    PhD, Adjunct Professor, School of Management, Hospitality and Tourism of the University of the Algarve

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Published

10.01.2024

Issue

Section

Business/Management: Research Papers

How to Cite

Portuguese manufacturing industry: determinants of new firm entry. (2024). Tourism & Management Studies, 11(2), 138-145. https://www.tmstudies.net/index.php/ectms/article/view/822

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