Entry and Intra-industry Mobility in the UK Car Market

Paul Geroski and A Murfin

Oxford Bulletin of Economics and Statistics, 1991, vol. 53, issue 4, 341-59

Abstract: This paper examines the pattern of entry across three segments of the U.K. car industry, 1958-83. A probit model of the entry decision is developed in which expected post-entry profits depend on expected post-entry advertising shares (and other factors) in a firm, market segment and time dependent manner. Applying this model to data for 17 firms in three market segments, the authors results suggest that late comers into the market were able to achieve far more market share penetration than first movers for a given share of advertising expenditure. The authors also uncover evidence that prior experience elsewhere in a market may have had a small effect on entry into any particular segment, and, in particular, that de novo entrants may have been sufficiently disadvantaged to have had to postpone entry for at least a year. Copyright 1991 by Blackwell Publishing Ltd

Date: 1991
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