This paper conducts the first general equilibrium analysis of the role of entry, exit and profits in industry dynamics …, to discriminate between three aspects of industry dynamics: the effect of entry and exit on market equilibrium, duration … simultaneous equilibrium model of profits, entry and exit. We find that indeed entrants play an entrepreneurial function causing …

-equilibrium model that features mergers, entry, and exit by heterogeneous firms. Mergers affect productivity directly through realized … firms' entry and exit decisions. We show that ignoring the implications of merger activity for public policies that promote … synergies, and indirectly through firms' incentives to enter or exit the industry. Merger activity increases average firm …

This paper studies the behaviour of firm entry and exit in response to macroeconomic shocks. We formulate a dynamic …, demand, monetary and entry cost shocks. The variables entering the VAR are output, inflation, the nominal interest rate …, profits and firm entry. The response of firm entry to the various shocks is freely estimated. Our main finding is that entry …

This paper studies the behaviour of firm entry and exit in response to macroeconomic shocks. We formulate a dynamic …, demand, monetary and entry cost shocks. The variables entering the VAR are output, inflation, the nominal interest rate …, profits and firm entry. The response of firm entry to the various shocks is freely estimated. Our main finding is that entry …