【文章內(nèi)容簡(jiǎn)介】 lets larger firms earn higher returns than smaller firms on similar innovations Imperfect information Many barriers to entry are ultimately due to new entrants’ information disadvantages or others’ poor information about the new information about labor, raw materials or output market conditions can lead new entrants to make costly mistakes. New market entrants also may find it difficult to attract good workers and suppor firms because employment and contracts withestablished firms, especially larger ones, are seen as less risky. However, steady entry might erode these informational barriers. Later entrants can learn from the mistakes of early entrants. Also, a higher steady flow of entrants reduces suppliers’ and workers’dependence on established firms and thus their resistance to switch jobs and business partners. In other words, more frequent new market entry reduces information based entry barriers. Entry barriers erected by entrenched firms Other entry barriers are erected by established firms, resolved to maintain their profits by deter ring prospective new petitors. A popular view of such barriers among economists is of established firms colluding to overcharge customers and build up war chests, which they then can use to finance predatory pricing to drive away new petitors. A sensible antitrust regime can work to limit this sort of behavior, but a plete elimination of market power is neither feasible nor all, a critical feature of the process of creative destruction is that innovators should benefit from shortterm monopolies due to their innovations. Entry barriers erected by government Perhaps the highest and most economically damaging entry barriers are those erected by governments. Government regulations and restrictions, legal logistics, taxes, and also corruption increase the costs of establishing a new (1990), Shleifer and Vishny (1993),Murphy, Shleifer and Vishny (1993) argue that artificial barriers to entry encourage innovative people to invest in exploiting the system, rather than in socially useful innovation. Government anized barriers to entry in developed countries are usually more on entry into “culturally sensitive” industries like broadcasting and magazines are on the books in Canada. Lenway, Morck and Yeung(1996) present evidence that . Government protection keeps inefficient old firms afloat and can reduce innovative firms payoff and thus interest to enter. In the United States, trade barriers against wood products, agricultural goods, automobiles, and many other imports act as barriersto foreign entrants. In many countries, inspection procedures, safety standards, environmental standards, and other seemingly worthwhile bureaucratic practices may mask barriers to entry that really serve to protect politically entrenched special interests. The ubiquitous nature of government created barriers to entry throughout the developed and developing world is undeniable. Larger firms may find government created entry barriers easier to overe than do small firms or independent innovators. Large firms have more resources, contact and clout. They can afford delays, lawyers, bribes, and campaign contributions. Property rights, entry barriers, and innovation The elimination of entry barriers and the protection of property rights creates a fertile environment for Schumpeterian innovation (Thurik,1996). Abundant anecdotal evidence suggests that economies with a high proportion of smaller firms are often more dynamic. In Hong Kong, Taiwan, and other parts of South East Asia, entry barriers appear to be low, and small and medium size firms’ entry rates and market shares are both high. These regions’ economic growth is well above the global average. The rapid growth of South Korea in the 1980’s was acpanied by an increasing market share for small and medium size firms, probably a consequence of the elimination of credit rationing policies that favored large firms(Nugent, 1994). China’s recent rapid growth is also linked to the emergence of many new small firms in village townships and in coastal areas, often in new industries. The economies of the eastern bloc under socialism, in contrast, relied on gigantic stateowned enterprises. Even without the perverse incentives of socialism, it is arguable that such gigantic enterprises were incapable of maintaining a pace of innovation to match that set by creative destruction in the West. Recently, after painful efforts to liberalize their economies, some Eas