Strategic entry deterrence in the audit industry: Evidence from the merger of professional accounting bodies

Author(s):  
Stephanie F. Cheng ◽  
Ole‐Kristian Hope ◽  
Danqi Hu
1998 ◽  
Vol 28 (3) ◽  
pp. 297-314 ◽  
Author(s):  
Iñaki Aguirre ◽  
Marı́a Paz Espinosa ◽  
Inés Macho-Stadler

Public Choice ◽  
2009 ◽  
Vol 143 (1-2) ◽  
pp. 3-22 ◽  
Author(s):  
John Cadigan ◽  
Pamela M. Schmitt

2011 ◽  
Vol 3 (1) ◽  
pp. 1-36 ◽  
Author(s):  
Glenn Ellison ◽  
Sara Fisher Ellison

This paper develops a new approach to testing for strategic entry deterrence and applies it to the behavior of pharmaceutical incumbents before patent expiration. It examines a cross section of markets, determining whether behavior is nonmonotonic in market size. Under some conditions, investment levels will be monotone in market size if firms do not invest to deter entry. Strategic investments to deter entry, however, may result in nonmonotonic investment because they are unnecessary in small markets, and impossible in large ones. Consistent with an entry-deterrence motivation is the finding that incumbents in medium-sized markets advertise less prior to patent expiration. (JEL D92, G31, L11, L21, L65)


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