Entry into Danish Manufacturing Industries

In recent years much attention has been paid to especially entry studies within industrial organisation research. Firm mobility is important in order to move resources towards the most productive industries, and the threat from potential entrants can restrain the incumbents from exploiting their market power as well as forcing them to be cost effective. Finally, a high firm mobility is important as the diffusion of new technology is often correlated with a high entry rate. This paper analyses the entry behaviour of Dansih firms from 1991 to 1993 based on a newly constructed longitudinal sample of 10,000 firms. High market growth rates are found to induce entry whereas a high capital requirement reduces entry to have only a weak effect on entry rates in the Danish manufacturing industries.