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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Appendix 1: Variable Descriptive Statistics
Appendix 1: Variable Descriptive Statistics
|Labour productivity £s||96,252.74||166,977.20||5714.29||330,000.00|
|Years business experience|
|< 1 year||2.05|
|> 15 years||31.81|
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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
- Market structure
- Market niches
- Small business