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ENTRY ORDER, PERFORMANCE, AND GEOGRAPHY: THE CASE OF THE CONVENIENCE‐STORE INDUSTRY IN JAPAN

Mitsukuni Nishida

International Economic Review, 2025, vol. 66, issue 2, 787-822

Abstract: Entry‐order effects on economic profits have not been extensively studied due to data limitations. This article empirically examines these effects on revenues and costs using a structural approach without requiring information on accounting profits and costs. Utilizing panel data from Japan's convenience‐store industry, I apply a two‐step estimator for many geographic markets. The results reveal that whereas early entrants gain 4.8% more revenue at the outlet level, subsequent entrants benefit from a 7.6% and 5.8% reduction in variable and expansion costs. Simulations suggest initial benefits from delayed entry, but these may dissipate over time, particularly in rapidly growing markets.

Date: 2025
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https://doi.org/10.1111/iere.12742

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International Economic Review is currently edited by Michael O'Riordan and Dirk Krueger

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