Determinants of Entry: A Study of Leading U.S. Supermarket Chain Entry Patterns

De novo entry by the top 20 U.S. supermarket chains into local markets is examined using Tobit analysis. We find that entry is related to potential entrants' proximity to the local market, market growth, concentration, the number of large chains that are incumbents in the local market, and the competency of potential entrants as measured by their recent internal expansion rate. With regard to competing theories that relate strategic entry barriers to entry patterns, different components of the analysis provide support for different hypotheses. However, the most general model provides little support for the contestability or Chicago efficiency rent hypotheses.


Issue Date:
1991
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/25226
Total Pages:
19
Series Statement:
Research Report No. 11




 Record created 2017-04-01, last modified 2017-08-24

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