Entry, Exit, and firm Dynamics in Long Run Equilibrium
Вход, выход и динамика фирм в долгосрочном равновесии
1992-09-01
SCID: 54.1/qab9ebyr
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dynamic stochastic modelentry and exitfirm size distributionlong-run industry equilibriumturnover rates
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Abstract (AI)
A dynamic stochastic model for a competitive industry is developed in which entry, exit, and the growth of firms' output and employment is determined. The paper extends long-run industry equilibrium theory to account for entry, exit, and heterogeneity in the size and growth rate of firms. Conditions under which there is entry and exit in the long run are developed. Cross sectional implications and distributions of profits and value of firms are derived. Comparative statics on the equilibrium size distribution and turnover rates are analyzed. Copyright 1992 by The Econometric Society.
Key Findings
1
A dynamic stochastic model is developed that endogenously determines entry, exit, and firms' output and employment growth in a competitive industry.
2
Comparative statics are provided for how equilibrium size distributions and turnover rates respond to parameter changes.
3
Conditions are derived that characterize when entry and exit occur in long-run equilibrium.
4
Cross-sectional distributions of firm profits and firm values are derived within the equilibrium framework.
5
The paper extends long-run industry equilibrium theory to incorporate entry, exit, and firm heterogeneity in size and growth rates.
Research Object
Competitive industry modeled as a dynamic stochastic system with heterogeneous firms undergoing entry, exit, and growth in output and employment
Research Subject
Long-run equilibrium properties of industry entry and exit and firm dynamics, including size and growth-rate heterogeneity, equilibrium size distribution, turnover rates, and distributions of profits and firm value
Publication Details
Publication Date
1992-09-01
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