Does Exogenous Barriers to Entry Make Firms Less Competitive? A Field Study in Inebolu

Structure-Conduct-Performance paradigm argues that market structure affects firm behavior and performance. In markets with high exogenous barriers to entry, incumbent firms are not afraid of competitor’s entering the market. Because of this reason they can have less motivation to behave competitive and this can affect both performance of firm and behavior. Shortly, exogenous barriers to entry can be reason of inefficient results in markets. The aim of this study is to investigate the relationship between barriers to entry and firm’s behavior. To this aim, a survey is conducted to Inebolu firms. By this way, we obtained the ideas and perceptions of firms about the relationship between barriers to entry and firm’s behavior. As a result of this research it is reached that in markets with high exogenous barriers to entry, incumbent firms behave less competitive consistent with the results of previous studies. This behavior also effects market and firm performance negatively