Entry Regulations, Welfare, and Determinants of Market Structure

Maican, Florin; Orth, Matilda

doi:10.1111/iere.12286

Cited by 10 publications

(3 citation statements)

References 62 publications

(60 reference statements)

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“…D. McGowan (2014) found that a higher level of barriers to entry helps avoid creative destruction processes; in other words, they encourage inefficient companies to remain in the market. Similar results are offered by Maican and Orth (2018) in the food sector in Sweden. Based on the empirical review presented, the following hypothesis is proposed:…”

Section: Industry Characteristicssupporting

confidence: 80%

Are Zombie Companies in Mexico the same as in the rest of the World?

Cárdenas

2021

RBGN

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Purpose -This paper aims to analyze the industry characteristics and the strategic behavior of companies that affect zombie companies.Theoretical framework -The study was based on the structure-conductperformance paradigm derived from industrial organization theory, because it allows us to explain a firm's results through behavior influenced by external and internal factors.Design/methodology/approach -For the data analysis, the corrected standard errors technique was used on a data set of 99 companies registered in the Mexican Stock Exchange during the period from 2013 to 2017.Findings -Among the main findings, it is evident that strategic behavior affects zombie companies. On the other hand, we found that market competitiveness negatively affects zombie companies, while barriers to entry positively affect them. The results allow us to identify similarities with and differences from other zombie firms in the world, based on the Latin American environment and its institutional policy.Practical & social implications of the research -Zombie firms have a negative connotation; however, they may become necessary to keep businesses operational in developing countries. Also, the study may provide a background to regulations on firm bankruptcy.Originality/value -The most important contribution is that this is a pioneering investigation that analyzes strategic behavior and its effect on zombie companies. Also, this may be one of the first studies to examine these companies in Latin America, making it possible to identify differences from zombie firms in the rest of the world due to environmental elements such as institutional policy.

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Section: Industry Characteristicssupporting

confidence: 80%

Are Zombie Companies in Mexico the same as in the rest of the World?

Cárdenas

2021

RBGN

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“…Another limitation of our study is that it does not evaluate the impact of FBR on consumer welfare, the employment effect beyond those of mom-and-pop stores, and industry productivity. Illustratively, it is possible that consumers in FBR cities pay higher prices due to the lack of competition and that existing research has demonstrated that other forms of entry barriers could be harmful to consumer welfare (Maican & Orth, 2018). These broader economic implications are highly important to understand the comprehensive impacts of chain store entry barriers and thus should be subject to future research on FBR.…”

Section: Conclusion and Discussionmentioning

confidence: 99%

Does Restricting the Entry of Formula Businesses Help Mom-and-Pop Stores? The Case of Small American Towns With Unique Community Character

Kim

Zhou

2021

Economic Development Quarterly

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Communities worldwide are increasingly introducing regulatory measures to protect independent businesses from chain stores, but the efficacy of these attempts is largely debated. Moreover, effects are likely to vary by the characteristics of the local economy, a consideration overlooked by existing studies. Using a sample of U.S. cities with unique community characteristics, the authors examine Formula Business Restrictions (FBR), a type of an American land use regulation that restricts the entry of “formula businesses.” The authors find that the passage of FBR led to a higher number and percentage of employees working in mom-and-pop businesses, which was primarily achieved by protecting existing ones from downsizing. This positive effect occurred over time with increasing magnitude. The authors also find heterogeneous effects on different sectors: FBR had strong positive effects on the retail sector, but not on the service sector. Findings suggest that chain store entry barriers can be beneficial for mom-and-pop businesses when designed carefully.

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“…Entry costs reduction in the formal sector has weaker effect on the decrease of informality, yet strong positive effect on welfare gains, GDP growth and wages. Similarly, Maican and Orth (2018) analyze Swedish retail food stores data and establish that, by enhancing competition, lower entry costs increase welfare in differentiated product markets.…”

Section: Business Reformsmentioning

confidence: 99%

Does Media Stimulate Reform Efforts?

Ramalho¹,

Saltane²

2019

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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Entry Regulations, Welfare, and Determinants of Market Structure

Cited by 10 publications

References 62 publications

Are Zombie Companies in Mexico the same as in the rest of the World?

Are Zombie Companies in Mexico the same as in the rest of the World?

Does Restricting the Entry of Formula Businesses Help Mom-and-Pop Stores? The Case of Small American Towns With Unique Community Character

Does Media Stimulate Reform Efforts?

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