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Entrepreneurial Firms: With Whom Do They Compete, and Where?

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Abstract

Many different theories that have attempted to explain why smaller entrepreneurial firms exist. Surprisingly, very little empirical work has tested the obvious questions, such as: Are small firm’s price-takers in highly competitive markets? Who do they compete against? What if they try to raise prices? Does innovation offer niche market protection? Using a large UK data set our key findings are that less than 5% of entrepreneurial firms operate in markets where they effectively have no competition and a quarter of all small firms would lose at least a third of their sales if they raised prices by 10%.

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Author information

Authors and Affiliations

  1. College of Business, Law, and Social Sciences, University of Derby, Derby, D22 1GB, UK

    Marc Cowling

  2. Business School, University of Derby, Derby, D22 1GB, UK

    Simon Peter Nadeem

Authors
  1. Marc Cowling
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  2. Simon Peter Nadeem
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Correspondence to Marc Cowling.

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Appendix 1: Variable Descriptive Statistics

Appendix 1: Variable Descriptive Statistics

 

Mean

SD

Low

High

Firm characteristics

    

 Size class

    

  Micro

64.58

   

  Small

28.83

   

  Medium

6.05

   

  Large

0.54

   
 

100.0

   

  Firm age

4.12

6.09

0

208

  High-Tech

30.31

 

0

1

 Innovation

    

  None

71.98

   

  Incremental

10.48

   

  Radical

17.54

   
 

100.0

   

  Labour productivity £s

96,252.74

166,977.20

5714.29

330,000.00

 Industry

    

  Primary—manufacturing

19.15

   

  Construction

5.58

   

  Services

75.27

   
 

100.0

   

Entrepreneurial characteristics

    

Board size

2.17

3.95

1

135

NED

15.00

 

0

1

 Years business experience

    

  None

4.57

   

  < 1 year

2.05

   

  1–3 years

13.52

   

  4-6 years

18.43

   

  7–9 years

10.38

   

  10–15 years

19.25

   

  > 15 years

31.81

   
 

100.0

   

 Spatial markets

    

  Local

54.01

   

  Regional

14.21

   

  National

26.44

   

  EU

2.32

   

  World

3.02

   
 

100.0

   

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Cowling, M., Nadeem, S.P. Entrepreneurial Firms: With Whom Do They Compete, and Where?. Rev Ind Organ 57, 559–577 (2020). https://doi.org/10.1007/s11151-020-09782-y

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