Barriers to New Competition¶
Bain, J. S. (1956). Barriers to New Competition: Their Character and Consequences in Manufacturing Industries. Harvard University Press.
Cited by¶
3 citations across 3 artifacts.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Access Friction
- In markets, barriers to entry — sunk capital, brand, licensing, network effects — keep incumbents protected and shape concentration; the industrial-organization tradition treats them as a primary determinant of long-run profitability.
This sourceFounds the industrial-organization treatment of barriers to entry — scale economies, product differentiation, absolute cost advantages — as a primary structural determinant of concentration and long-run profitability.
- In markets, barriers to entry — sunk capital, brand, licensing, network effects — keep incumbents protected and shape concentration; the industrial-organization tradition treats them as a primary determinant of long-run profitability.
- Economies of Scale
- Bain (1956) documented how minimum-efficient-scale requirements translate directly into entry barriers; automotive, semiconductor, petrochemical, pharmaceutical, and aerospace industries have all been reshaped by minimum-efficient-scale considerations that eventually pushed surviving firms toward very large production runs.
This sourceClassic empirical study measuring entry conditions in 20 U.S. manufacturing industries and identifying scale-economy (minimum-efficient-scale) requirements as a structural entry barrier.
- Bain (1956) documented how minimum-efficient-scale requirements translate directly into entry barriers; automotive, semiconductor, petrochemical, pharmaceutical, and aerospace industries have all been reshaped by minimum-efficient-scale considerations that eventually pushed surviving firms toward very large production runs.
Domain-specific¶
- Barrier to Entry
- The three-way taxonomy standard in later competition analysis belongs to neither author (the strategic category postdates both, arising from the Spence–Dixit entry-deterrence literature), and distinguishes three types: structural barriers, which arise from cost or demand conditions in the industry — economies of scale, capital intensity, product differentiation, network effects — and require no deliberate action by the incumbent; strategic barriers, which incumbents erect deliberately to deter or disadvantage entrants — predatory pricing, excess capacity as a commitment to post-entry price war, exclusive contracts with input suppliers or distributors; and legal barriers, which governments install — patents, copyrights, occupational licensing, regulatory certification requirements
This sourceBain's originating study of barriers to new competition, which supplies the content of the structural category - economies of scale, product differentiation, and absolute cost and capital advantages, his own conditions of entry - and is one of the two authors the sentence excludes from the later three-way taxonomy; the strategic and legal categories are not his.
Supported in partVerified against the source
- The three-way taxonomy standard in later competition analysis belongs to neither author (the strategic category postdates both, arising from the Spence–Dixit entry-deterrence literature), and distinguishes three types: structural barriers, which arise from cost or demand conditions in the industry — economies of scale, capital intensity, product differentiation, network effects — and require no deliberate action by the incumbent; strategic barriers, which incumbents erect deliberately to deter or disadvantage entrants — predatory pricing, excess capacity as a commitment to post-entry price war, exclusive contracts with input suppliers or distributors; and legal barriers, which governments install — patents, copyrights, occupational licensing, regulatory certification requirements
Verification¶
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