Review article
https://doi.org/10.30924/mjcmi.24.2.9
Barriers hindering the entry of new firms to the competitive market and profitability of incumbents
Xhavit Islami
orcid.org/0000-0002-6653-4166
; University “Kadri Zeka”, Faculty of Economy, Department of Management, Gjilan, Kosovo
Vjosa Islami
; University “Hasan Prishtina”, Faculty of Economy, Department of Management and Informatics, Prishtinë, Kosovo
Marija Topuzovska Latkovikj
orcid.org/0000-0001-6069-5690
; Saints Cyril and Methodius University, Institute of Sociological, Political and Juridical Research, Skopje, North Macedonia
Enis Mulloli
orcid.org/0000-0003-2387-8652
; University “Hasan Prishtina”, Faculty of Economy, Department of Management and Informatics, Prishtinë, Kosovo
Abstract
Recently, entering new firms into a competitive market is getting harder due to different industry barriers. Addressing this concern, the aim of this paper is to measure the relationship between industry barriers that prevent the entry of new rivals and increase the profitability of incumbent firms. The study was based on the data of one hundred and seven executives of firms that operate in the Republic of Kosovo, and it attempts to assert and order the market entry barriers. The responses were collected by questionnaires and the econometric model was constructed, to test this relationship. The findings were obtained using descriptive statistics, Pearson correlation, and multivariate regression. Econometric results indicated that seven dimensions of industry barriers have a direct and positive impact on the profitability of incumbents and serve as barriers for new firms to enter the market, and showed that business executives in Kosovo perceive capital requirements of non-incumbents as the most important entry barrier, whereas access to distribution channels as the least important. The theoretical and practical implications of these findings are discussed and explained.
Keywords
entry barriers; new firms; industry factors; profitability of incumbents; the competitive market
Hrčak ID:
229638
URI
Publication date:
18.12.2019.
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