Browsing by Subject "Entry"

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Entry regulation and competition : evidence from retail and labormarkets of pharmacists
(2021) Unsorg, Maximiliane; Rostam-Afschar, Davud
We examine a deregulation of German pharmacists to assess its effects on retail and labor markets. From 2004 onward, the reform allowed pharmacists to expand their single-store firms and to open or acquire up to three affliated stores. This partial deregulation of multi-store prohibition reduced the cost of firm expansion substantially and provides the basis for our analysis. We develop a theoretical model that suggests that the general limitation of the total store number per firm to four is excessively restrictive. Firms with high managerial effciency will open more stores per furm and have higher labor demand. Our empirical analysis uses very rich information from the administrative panel data on the universe of pharmacies from 2002 to 2009 and their affiliated stores matched with survey data, which provide additional information on the characteristics of expanding firms before and after the reform. We find a sharp immediate increase in entry rates, which continues to be more than five-fold of its pre-reform level after five years for expanding firms. Expanding firms can double revenues but not profits after three years. We show that the increase of the number of employees by 50% after five years and the higher overall employment in the local markets, which increased by 40%, can be attributed to the deregulation.
Die neue Außenhandelstheorie : das Melitz-Modell
(2009) Hofmann, Patricia
Standard international trade lectures normally comprises three central theories: the Ricardian Model, the Heckscher-Ohlin-Samuelson Modell and New Trade Theory a la Krugman 1979 and 1980. Nowadays this trilogy needs to be enhanced with the basic concepts of a new class of trade models: the New New Trade Theory which accounts for firm heterogeneity and market entry costs. The basic objective of this paper is to present the contribution of Marc J. Melitz in Econometrica 2003 which is central to this new class of trade theory. I show how it is embedded in antecedent theory and highlight the new insights for trade patterns stemming from it.