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dc.contributor.authorPerez-Saiz, Hectoren_US
dc.date.accessioned2011-01-27en_US
dc.date.accessioned2011-12-15T12:55:25Z-
dc.date.available2011-12-15T12:55:25Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/53761-
dc.description.abstractIn many industries, firms usually have two choices when expanding into new markets: They can either build a new plant (greenfield entry) or they can acquire an existing incumbent. In the U.S. cement industry, the comparative advantage (e.g., TFP or size) of entrants versus incumbents and regulatory entry barriers are important factors that determine the means of expansion. Using a rich database of the U.S. Census of Manufactures (1963-2002), an entry game is proposed to model this decision and estimate the supply and demand primitives to determine the importance of these factors. Two policies that affect the entry behavior and industry equilibrium are considered: An asymmetric environmental policy that creates barriers to greenfield entry and a policy that creates barriers to entry by acquisition. In the counterfactual analysis it is found that a less favorable environment for acquisitions during the Reagan-Bush administration would decrease the acquired plants by 90% and increase greenfield entry by 21%. Also, the Clean Air Act Amendments of 1990 increased the number of acquisitions by 3.5%. Furthermore, my simulations suggest that regulations that create barriers to greenfield entry are less favorable in terms of welfare than regulations that create barriers to entry by acquisition. Finally, it is shown how the parameter estimates change with the traditional approach in the entry literature where entry by acquisition is not considered, and when using a simple OLS estimation.en_US
dc.language.isoengen_US
dc.publisherBank of Canada Ottawaen_US
dc.relation.ispartofseriesBank of Canada Working Paper 2011,1en_US
dc.subject.jelL13en_US
dc.subject.jelL40-
dc.subject.jelL61-
dc.subject.ddc330en_US
dc.subject.keywordProductivityen_US
dc.subject.keywordMarket structure and pricingen_US
dc.subject.keywordEconometric and statistical methodsen_US
dc.subject.stwStrategisches Managementen_US
dc.subject.stwMarkteintritten_US
dc.subject.stwDirektinvestitionen_US
dc.subject.stwUnternehmensgründungen_US
dc.subject.stwÜbernahmeen_US
dc.subject.stwMarktstrukturen_US
dc.subject.stwProduktivitäten_US
dc.subject.stwUSAen_US
dc.titleBuilding new plants or entering by acquisition? Estimation of an entry model for the U.S. cement industryen_US
dc.typeWorking Paperen_US
dc.identifier.ppn644772611en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Bank of Canada Working Papers

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