Market Structure in Transition: Entry and Competition in Slovakia

Martin Lábaj, Karol Morvay, Peter Silaniè and Christoph Weiss

No 5, Department of Economic Policy Working Paper Series from Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava

Abstract: The present paper provides first empirical evidence on the relationship between market size and the number of firms for a transition economy. We estimate size thresholds required to support different numbers of firms for seven retail and professional service industries in a large number of distinct geographic markets in Slovakia. The empirical analysis is carried out for three time periods (1995, 2001 and 2010) characterizing different stages of the transition process. Our results suggest that the relationship between market size and the number of firm has changed substantially over time. While entry threshold ratios tend to be larger than one and decline with the number of firms in most professions in 1995, the estimation results obtained for 2010 suggest entry threshold ratios much closer to one. This finding is consistent with observations suggesting a significant decline in entry barriers as well as an intensification of competition over time.

Keywords: entry thresholds; competition; Slovakia; transition; geographic markets (search for similar items in EconPapers)
JEL-codes: D22 L22 M13 R11 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2014-01-15
New Economics Papers: this item is included in nep-com, nep-ent and nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:brt:depwps:005

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