Partnerships vs. Firms Entry Strategies

Michele Moretto and Gianpaolo Rossini (rossini@spbo.unibo.it)
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Gianpaolo Rossini: Universit… di Bologna

No 49, "Marco Fanno" Working Papers from Dipartimento di Scienze Economiche "Marco Fanno"

Abstract: From 1997 to 2001 we observe a faster growth in the number of Nonemployer businesses (mostly Partnerships) vis-…-vis Firms in the USA, a country with the mildest asymmetries between the two types of enterprise with respect to taxation, administrative entry barriers and other institutional aspects. The different speed of net entry may be due to the internal organisation of the two types of enterprise and its relation to some market features. In a continuous time stochastic environment, with sunk costs, we model entry as a growth option. Partnerships and Firms display speci?c entry patterns in terms of output price and size since they react in diverse fashions to market uncertainty. In most cases, the Partnership is less risky and better suited to enter under conditions of high volatility, as during the years between 1997 and 2001.

Keywords: Entry Strategies; Uncertainty; Partnership; Firm (search for similar items in EconPapers)
JEL-codes: G13 J54 L21 L3 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2007-09
New Economics Papers: this item is included in nep-com, nep-cse, nep-ent, nep-ind and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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