Management : Journal of Contemporary Management Issues (Jan 2019)
The relationship among barriers hindering the entry of new firms to the competitive market
Abstract
Recently, the entry of new firms into a market is getting more difficult, due to different industry factors. To address this concern, the aim of this paper is to measure the relationship between industry barriers that affect the profitability of incumbents and prevent the entry of new rivals. The study was based on the data of 107 respondent firms that operate in the Republic of Kosovo. The responses were obtained by a questionnaire and the econometric model was constructed, in order to test this relationship. The findings were obtained using descriptive statistics, Pearson correlation, and multivariate regression. Econometric results indicate that the industry barriers have a direct and positive impact on the profitability of incumbents and serve as a barrier for new firms to enter into the market. The correlation coefficient between industry factors was also different from zero. This paper provides an econometric model to measure the relationship between industry factors that serve as entry barriers for rivals and their effect on the profitability of incumbents.
