Strategic Entry and Potential Competition: Evidence from Compressed Gas Fuel Retail

Andrea Pozzi, Giulia Pavan and Gabriele Rovigatti

No 12113, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We provide novel evidence on the effect of the threat of potential competition on the timing of entry in a new and growing industry. Exploiting a change in regulation in the Italian retail fuel market that generates exogenous variation in the number of potential entrants in the emerging Compressed Natural Gas segment, we show that markets with a higher number of potential entrants witness speedier entry decisions by firms managers. We document that this result is likely driven by an increase in the incentives to preempt the market due to heightened risk of being anticipated by competitors.

Keywords: Preemption; Potential entrants; Retail fuel market (search for similar items in EconPapers)
JEL-codes: L12 L22 L81 (search for similar items in EconPapers)
Date: 2017-06
New Economics Papers: this item is included in nep-com, nep-ene and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Strategic entry and potential competition: Evidence from compressed gas fuel retail (2020)
Working Paper: Strategic Entry and Potential Competition - Evidence from Compressed Gas Fuel Retail (2017)
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