ENTRY PROPENSITY, THE SUPPLY OF ENTRANTS AND THE SPATIAL-DISTRIBUTION OF BUSINESS UNITS

An extensive new database is used in the estimation of models explaining entry propensities across the cross-section of British manufacturing industries. Few previous studies of industrial entry have adequately incorporated the supply of prospective entrants. This is redressed here by allowing for the possibility that prospective business founders are industry-specific with their numbers varying among industries. The spatial distribution of business units within an industry is also shown to have an important bearing on entry, an effect which also appears to have been overlooked in previous studies.