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Entry, exit, and the determinants of market structure

Publication ,  Journal Article
Dunne, T; Klimek, SD; Roberts, MJ; Xu, DY
Published in: RAND Journal of Economics
September 1, 2013

This article estimates a dynamic, structural model of entry and exit for two US service industries: dentists and chiropractors. Entry costs faced by potential entrants, fixed costs faced by incumbent producers, and the toughness of short-run price competition are important determinants of long-run firm values, firm turnover, and market structure. In the dentist industry entry costs were subsidized in geographic markets designated as Health Professional Shortage Areas (HPSA) and the estimated mean entry cost is 11 percent lower in these markets. Using simulations, we find that entry cost subsidies are less expensive per additional firm than fixed cost subsidies. © 2013, RAND.

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Published In

RAND Journal of Economics

DOI

EISSN

1756-2171

ISSN

0741-6261

Publication Date

September 1, 2013

Volume

44

Issue

3

Start / End Page

462 / 487

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3802 Econometrics
  • 3801 Applied economics
  • 14 Economics
 

Citation

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Dunne, T., Klimek, S. D., Roberts, M. J., & Xu, D. Y. (2013). Entry, exit, and the determinants of market structure. RAND Journal of Economics, 44(3), 462–487. https://doi.org/10.1111/1756-2171.12027
Dunne, T., S. D. Klimek, M. J. Roberts, and D. Y. Xu. “Entry, exit, and the determinants of market structure.” RAND Journal of Economics 44, no. 3 (September 1, 2013): 462–87. https://doi.org/10.1111/1756-2171.12027.
Dunne T, Klimek SD, Roberts MJ, Xu DY. Entry, exit, and the determinants of market structure. RAND Journal of Economics. 2013 Sep 1;44(3):462–87.
Dunne, T., et al. “Entry, exit, and the determinants of market structure.” RAND Journal of Economics, vol. 44, no. 3, Sept. 2013, pp. 462–87. Scopus, doi:10.1111/1756-2171.12027.
Dunne T, Klimek SD, Roberts MJ, Xu DY. Entry, exit, and the determinants of market structure. RAND Journal of Economics. 2013 Sep 1;44(3):462–487.
Journal cover image

Published In

RAND Journal of Economics

DOI

EISSN

1756-2171

ISSN

0741-6261

Publication Date

September 1, 2013

Volume

44

Issue

3

Start / End Page

462 / 487

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3802 Econometrics
  • 3801 Applied economics
  • 14 Economics