Entrepreneurship, Competitiveness and Local Development Frontiers in European Entrepreneurship Research
Frontiers in European Entrepreneurship Research
Edited by Luca Iandoli, Hans Landström and Mario Raffa
Chapter 3: Do Entry Barriers, Perceived by SMEs, Affect Real Entry? Some Evidence from the Netherlands
3. Do entry barriers, perceived by SMEs, aﬀect real entry? Some evidence from the Netherlands S. Gerhard Dijkstra, Ron Kemp and Clemens Lutz INTRODUCTION1 Entries of new ﬁrms into the market foster the dynamics in the economy. Entrants have an equilibrating function, as ﬁrms will enter the market if proﬁts are above the long-run competitive level. Entrants are also considered as important agents of change, as new ﬁrms may introduce new products or production processes. The upshot is that entry contributes to allocative as well as dynamic eﬃciency in the market (Audretsch and Thurik, 2001). However, several mechanisms can prevent ﬁrms from entering the market and hamper the process of allocative and dynamic eﬃciency. Consequently, barriers to entry are one of the major issues in entrepreneurship and competition policy. In Blees et al. (2003) the results of a comprehensive literature study on entry barriers have been published: the theoretical background and the operating mechanisms are discussed. The report describes in total 37 structural and strategic barriers to entry and discusses the expected speciﬁc eﬀects on small businesses. The literature study concludes that small entrants suﬀer more from barriers to entry than do large entrants (often existing companies active in another product or geographical market) and provides us with the argument to focus this study on small and medium-sized enterprises (SMEs). For example, it is argued that barriers related to advertising, brand name, capital requirements, cost of operating abroad, high wages, research and development...
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