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

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Abstract

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.

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Authors and Affiliations

  1. Centre for Advanced Small Business Economics, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands

    Martin Carree & Roy Thurik

  2. EIM Small Business Research and Consultancy, P.O. Box 7001, 2701 AA, Zoetermeer, The Netherlands

    Martin Carree & Roy Thurik

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  1. Martin Carree
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  2. Roy Thurik
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Additional information

The authors are indebted to Kees Bakker, Anne Bruijns, Henk Pays, Frans Pleijster and Herman van Schaik of the EIM Small Business Research and Consultancy (EIM) for providing and elaborating the data. Helpful suggestions were received from René Belderbos, Christiaan Heij and Aad Kleijweg. We are especially grateful to the Bedrijfssignaleringssysteem (BSS) of EIM and the Central Registration Office (CRK) for placing the data at our disposal. Financial support from the Netherlands Organization for Scientific Research (NWO) is acknowledged.

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Carree, M., Thurik, R. Entry and exit in retailing: Incentives, barriers, displacement and replacement. Rev Ind Organ 11, 155–172 (1996). https://doi.org/10.1007/BF00157664

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