New Business Formation and Incumbents’ Perception of Competitive Pressure

Javier Changoluisa () and Michael Fritsch ()
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Javier Changoluisa: Friedrich Schiller University Jena

Review of Industrial Organization, 2020, vol. 56, issue 1, No 9, 165-197

Abstract: Abstract We investigate the relationship between new business formation and the level of competitive pressure that is perceived by manufacturing incumbent establishments. The perceived pressure of competition is stronger when entry in the respective industry is higher. This relationship holds not only for start-ups that are located in the same region of the incumbent, but also for start-ups across all regions of Germany. Additionally, we find that particularly small, low-productivity incumbents—as well as incumbents that are located in highly populated regions—are more likely to associate new business formation with high levels of competitive pressure. We also identify other incumbent characteristics that influence the overall level of perceived competitive pressure.

Keywords: New business formation; Competitive pressure; Regional competition; Incumbent firms; Manufacturing industries (search for similar items in EconPapers)
JEL-codes: D20 L26 L60 O12 R11 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Working Paper: New Business Formation and Incumbents' Perception of Competitive Pressure (2016)
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DOI: 10.1007/s11151-019-09699-1

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