The Impact of Entry Barriers on Firm Entry - the Case of the Computer, Communications and other Electronic Equipment Manufacturing Industry

Entry barriers affect the entry of new firms into an industry or the exit of incumbents from an industry, and the purpose of this paper is to investigate the impact of different types of entry barriers on the net entry of firms. This paper empirically analyses the computer, communications and other electronic equipment manufacturing industry in China using time series data from 2009-2022 using multiple linear regression models. The results show that structural barriers, behavioural barriers and administrative barriers all significantly and negatively affect the net entry rate, i.e. they reduce the number of new entrants and increase the survival rate of incumbents. This implies that barriers to entry reduce the level of competition within an industry, which may harm market efficiency and consumer welfare. The research in this paper has both theoretical and practical implications for understanding and improving competition in the computer, communications and other electronic equipment manufacturing industry.