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Strategic entry and potential competition: Evidence from compressed gas fuel retail

Giulia Pavan, Andrea Pozzi and Gabriele Rovigatti ()

International Journal of Industrial Organization, 2020, vol. 69, issue C

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. 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: 2020
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Related works:
Working Paper: Strategic Entry and Potential Competition: Evidence from Compressed Gas Fuel Retail (2017) Downloads
Working Paper: Strategic Entry and Potential Competition - Evidence from Compressed Gas Fuel Retail (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:69:y:2020:i:c:s0167718719300943

DOI: 10.1016/j.ijindorg.2019.102566

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