Entrepreneurial Firms: With Whom Do They Compete, and Where?

Marc Cowling and Simon Peter Nadeem ()
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Simon Peter Nadeem: University of Derby

Review of Industrial Organization, 2020, vol. 57, issue 3, No 4, 559-577

Abstract: Abstract Many different theories that have attempted to explain why smaller entrepreneurial firms exist. Surprisingly, very little empirical work has tested the obvious questions, such as: Are small firm’s price-takers in highly competitive markets? Who do they compete against? What if they try to raise prices? Does innovation offer niche market protection? Using a large UK data set our key findings are that less than 5% of entrepreneurial firms operate in markets where they effectively have no competition and a quarter of all small firms would lose at least a third of their sales if they raised prices by 10%.

Keywords: Competition; Entrepreneurship; Market structure; Market niches; Small business (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s11151-020-09782-y

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