The Effect of Entry on Profit Margins in the Short and Long Run

Paul Geroski

Annals of Economics and Statistics, 1989, issue 15-16, 333-353

Abstract: This paper examines a dynamic feedback model of entry and profit margins, tracing the interactions between the two in the short and long run. Applied to a 6 year panel of data for 85 UK three digit industries during the period 1974-1979, the results suggest that entry responds positively to expected margins, but in a very noisy fashion. The short run dynamics of margins show signs consistent with the view that some entry pre-emption occurs. High margins return to long run equilibrium levels reasonably promptly, but actual flows of entry have only a modest effect on margins in the short run.

Date: 1989
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.jstor.org/stable/20075763 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:1989:i:15-16:p:333-353

Access Statistics for this article

Annals of Economics and Statistics is currently edited by Laurent Linnemer

More articles in Annals of Economics and Statistics from GENES Contact information at EDIRC.
Bibliographic data for series maintained by Secretariat General () and Laurent Linnemer ().