Essays on firms' entry and growth

Abstract

Firm-level market entry decisions and post-entry growth are at the core of the industrial organization literature. This dissertation investigates the impact of demand side factors on firm-level market entry, subsequent survival, and growth. We find that firms with more market entry experience are more likely to enter new markets, and firms with large idiosyncratic demand shocks are more likely to survive and grow faster in international markets. In this dissertation, structural models are employed to explain the significance of demand factors. Three main findings are: 1. If pharmaceutical firms enter a current drug market,they can gain 3-4 percent more market share in the next market through demand side spillovers. 2. Idiosyncratic demand shocks have a significant impact on the behavior of Chinese exporters. In particular, Chinese exporters are more likely to survive in an international market with a higher demand shock. In comparison, differences in firm-level productivity have little impact on survival. 3. Export demand growth can explain at least 18 percent of the aggregate export growth, while firm-level productivity growth explains at most 5 percent aggregate export growth..