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Abstract.  Two firms are contemplating entry into a market that is viable for only one firm in a good state. We show that even if each firm receives a signal that perfectly reveals a good state, both might strategically delay entry, owing to the fear that the other firm might enter in the same period as well. We also find the conditions where the informed firm will let the rival firm know about the market's profitability and the two will merge to enter the market. We discuss the applications of this model to the oil industry and the generic drug industry.

The pharmaceutical sector encompasses a wide range of business activities – research and product development, manufacturing, marketing, international business, wholesale, retail and services. Consequently, it is facing the contemporary challenges of globalisation, sustainable development, social, economic and political change. At the same time, pharmaceuticals have a significant impact on the provision of health care, which limits the freedom of business. In framework of this research the applicability of the International business theories to pharmaceutical sector, as well as the major factors influencing the enterprise' choice of the market entry mode are explored. The organisation of healthcare and its financing system are important external factors influencing the market entry strategy of the pharmaceutical company. Focusing on the healthcare market as a platform for medical entrepreneurship and significant regulatory interventions, it should be noted that, in a context of globalization, healthcare is characterised as both an international business and an area to strong government influence and demand generation. In the process of market entry strategy development, pharmaceutical enterprises more often choose the direct exporting, contractual modes and foreign direct investments as the market entry modes. In these circumstances, the Managed Entry Agreements become topical to ensure the availability of new medicines for patients and to encourage the pharmaceutical enterprises to come into market.

As a part of their industry or competition policies governments decide whether to allow for free market entry of firms or to regulate market access. We analyze a model where governments (ab)use these policy decisions for strategic reasons in an international setting. Multiple equilibria of this game emerge; and if the cost difference between domestic and foreign firms is 'significant', all equilibria induce the same allocation, where production exclusively takes place in the cost-efficient country. Moreover, these equilibria are Pareto efficient if this cost difference is 'substantial'. Only if cost differences are 'insignificant', may production take place in both countries in equilibrium.

The authors develop a simple analytical framework to study the welfaremaximizing environmental standards when market entry is endogenous and firms can circumvent regulation by bribing corrupt officials. Corruption changes the tradeoff in environmental policy. Corruption leads more polluting firms to enter into the market, which requires tighter environmental regulation. However, corruption also makes trading in some environmental protection for a marginally higher market entry optimal for the government.

AbstractWe analyze the impact of tax policy on the market entry of firms in the presence of corruption and tax evasion. In a world with corruption, firms must bribe corrupt officials to enter the market. For a given level of bribes, higher tax rates and stricter enforcement of taxation decrease tax evasion but typically reduce market entry. However, when the level of bribes reacts to tax policy, higher taxes and stricter enforcement of taxation can have a double benefit. Up to a certain threshold, for which we develop a simple rule, stricter enforcement increases market entry and reduces tax evasion.

AbstractThe authors develop a simple analytical framework to study the welfare-maximizing environmental standards when market entry is endogenous and firms can circumvent regulation by bribing corrupt officials. Corruption changes the tradeoff in environmental policy. Corruption leads more polluting firms to enter into the market, which requires tighter environmental regulation. However, corruption also makes trading in some environmental protection for a marginally higher market entry optimal for the government.

This paper considers two types of components, main and peripheral, both indispensable for consumption. There are two first‐party incumbent firms, each producing the two components, and one potential third‐party entrant that would supply only the peripheral one. By using a two‐dimensional Hotelling model, I show that entry takes place if the peripheral component is sufficiently differentiated. Furthermore, entry of the potential entrant does not harm the incumbents. It can even be beneficial when the entrant captures consumers that were not participating in the market, as it generates additional demand for the incumbents. Finally, entry is efficient for society due to a significant increase in the consumer surplus, while the expected profit of the third party does not cover its entry cost for some parameter values. In this case, government intervention to encourage the third party to enter the market may be desirable.

AbstractIs the decision of firms to pursue social interest and promote social progress philanthropic or motivated by strategic reasons? Using a simple Spence–Dixit entry model game with homogeneous goods, this paper studies the possible anticompetitive effect of the adoption of corporate social responsibility (CSR) in the form of "consumer friendliness" (i.e., firms' attention to the welfare of consumers). It is shown that, when the market becomes contestable, the incumbent can select to adopt CSR to hamper to a greater extent the potential entrant, regardless of its choice to engage in CSR activities. In other words, CSR can become a strategic barrier to entry.