Business Commons^™

Two Essays On Market Entry And Exit: Empirical Evidence From Airline Industry, Sina Aghaie

Theses and Dissertations

The proliferation of low-cost competitors has increasingly eroded incumbent firms’ market shares and profitability in recent decades. However, incumbents are still uncertain about how to handle this new challenge. The two essays in this dissertation aim to contribute to the marketing strategy and competitive dynamics literature by exploring the link between incumbents’ marketing-mix activities and low-cost rival’s market entry, exit, and the threat of entry decisions.

In the first essay, I study a common and important phenomenon – the marketing tactics that incumbent firms employ to drive new low-cost entrants out of the market. Specifically, I investigate how incumbents’ price, …

The Dynamics Of Market Entry: The Effects Of Mergers And Acquisitions On Entry In The Banking Industry, Allen N. Berger, Seth D. Bonime, Lawrence G. Goldberg, Lawrence J. White

Faculty Publications

We study the dynamics of market entry following mergers and acquisitions (M&As) using banking industry data. The findings suggest that M&As are associated with statistically and economically significant increases in the probability of entry. The data suggest that M&As affect the proportion of the markets with entry by about 10-20%. These findings also suggest that entry may be part of an "external" effect of M&As that helps supply credit to some relationship-dependent small business borrowers. Our results are robust to the use of alternative econometric methods, changes in specifications of the exogenous variables, and alteration of the data samples.