Predicting entry of Swedish wholesale firms into local markets
2013 (English)Report (Other academic)
Applying microeconomic theory, we develop a forecasting model for firm entry into local markets and test this model using data from the Swedish wholesale industry. The empirical analysis is based on directly estimating the profit function of wholesale firms. As in previous entry studies, profits are assumed to depend on firm- and location-specific factors,and the profit equation is estimated using panel data econometric techniques. Using the residuals from the profit equation estimations, we identify local markets in Sweden where firm profits are abnormally high given the level of all independent variables included in the profit function. From microeconomic theory, we then know that these local markets should have higher net entry than other markets, all else being equal, and we investigate this in a second step,also using a panel data econometric model. The results of estimating the net-entry equation indicate that four of five estimated models have more net entry in high-return municipalities, but the estimated parameter is only statistically significant at conventional levels in one of our estimated models.
Place, publisher, year, edition, pages
Borlänge: Högskola Dalarna , 2013.
Working papers in transport, tourism, information technology and microdata analysis, ISSN 1650-5581 ; 14
firm location, firm entry, firm demography, spatial distribution of profits, spatial distribution of firms
Social and Economic Geography Economics and Business
Research subject Komplexa system - mikrodataanalys, General Microdata Analysis - retail
IdentifiersURN: urn:nbn:se:du-12227OAI: oai:DiVA.org:du-12227DiVA: diva2:621905
FunderSwedish Retail and Wholesale Development Council