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Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/120573
Firms' operational costs, market entry and growth
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The industrial organizational literature identifies operational costs as being an important determinant of industry evolution over time; however, it also shows that they can be endogenous and time-dependent. In this paper, we analyze the effects of endogenous and time-dependent operational costs on economic activity and, hence, on economic growth. We show that the particular nature of these costs determines the way in which the overall number of firms grows, which ultimately determines the pattern of economic growth. Our analysis differs from other approaches in that (i) a new firm is associated with the creation of a new product in such a way that a planned expenditure of resources is required (e.g. R&D), and (ii) an accumulation law for the growth of the number of firms is assumed. Hence, we show that growth can occur endogenously in an economy without any specific growth generating sector.
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CARDONA COLL, Daniel and SÁNCHEZ-LOSADA, Fernando. Firms' operational costs, market entry and growth. The B.E. Journal of Macroeconomics. 2016. Vol. 16, num. 1, pags. 211-229. ISSN 1935-1690. [consulted: 10 of June of 2026]. Available at: https://hdl.handle.net/2445/120573