The dynamics of entry and exit in turkish manufacturing industry

Secil Kaya () and Yesim Üçdogruk ()
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Secil Kaya: Department of Economics, METU
Yesim Üçdogruk: Department of Economics, METU

No 202, ERC Working Papers from ERC - Economic Research Center, Middle East Technical University

Abstract: Entry and exit are crucial elements of market selection process which leads to the restructuring, adaptation and evolution of an industry. While the importance of entry and exit has been recognised, attention has focused almost exclusively on quantifying barriers to them, rather than on investigating the determinants of entry and exit and measuring the magnitude of these processes. This paper analyses the entry and exit dynamics of Turkish manufacturing industry defined at the 4-digit ISIC level for the period 1981-1997. While, on the one hand, inflation targeting focuses on the determinants of entry and exit and their sectoral variation, on the other hand, inflation targeting verifies the link between entry and exit. This paper employs a dynamic panel data estimation procedure to investigate the relationship between entry and exit and to estimate the models of entry and exit. Our empirical findings suggest that rates of entry and exit are determined by profit margin, growth rate of output, concentration ratio, labor productivity, average wage rate, advertisement intensity, capital intensity and wage and productivity differentials as explanatory variables.

Keywords: Industrial dynamics; entry; exit; manufacturing; dynamic panel data (search for similar items in EconPapers)
JEL-codes: L11 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2002-02, Revised 2002-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:met:wpaper:0202

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