The dynamics of entry and exit are examined across different categories of farms depending on the timing of entry and/or exit through a detailed panel data set on Canadian agriculture. The decomposition highlights the differences in the groups of farms and provides information affecting entry and exit beyond what can be inferred from net exit numbers. While aggregate values show a gradual fall in farm numbers over time and suggest a sector in decline, the decomposition reveals that approximately one-third of farms in each census are new entrants but only half of these will be in operation by the time of the next census. The results of the analysis suggest that many of the factors that increase the probability of entry also increase the probability of exit; smaller operations, producing vegetable/horticulture goods, located in more densely populated regions, are more likely to enter the sector but also to leave farming. Multigeneration involvement and a possible succession plan also contribute to the longevity of the farm operation after it has been launched. The results also highlight the decline of the mid-size operations and the growing importance of large farms in the overall share of production.

The historical dynamics of entry and exit in the financial exchange industry are analyzed for a panel of 327 US exchanges from 1855 through 2012. We focus on economic, technological and regulatory factors. Using novel panel data evidence, we empirically test whether these factors are consistent with existing financial theories. We find that US exchanges are more likely to exit per year after the passage of the Securities Exchange Act. The telephone, literacy and regulation are robust predictors of financial exchange dynamics, whereby an upward trend in literacy is an important driver of exchange entry.

After a strong expansion across the United States, farmers markets’ (FMs) growth rate has declined in spite of policymakers’ interest in promoting them. In this study we model farmers’ participation in FMs and investigate what market factors affect FMs’ location using zip-code-level data for the New England states. Our results suggest that market size, education, presence of children in the household and SNAP participation lend to the establishment of FMs, more than income per se. Farming activities has a positive association with the likelihood of FMs, while proxies for establishment costs and the presence of traditional distribution channels may play a limiting role in their formation.

A recent theoretical literature highlights the role of endogenous firm entry as an internal amplification mechanism of business cycle fluctuations. The amplification mechanism works through the competition effect (CE) and the variety effect (VE). This paper tests the significance of this amplification mechanism, quantifies its importance, and disentangles the CE and VE. To this end, we estimate a medium-scale real business cycle model with firm entry for the U.S. economy. The CE and VE are estimated to be statistically significant. Together, they amplify the volatility of output by 8.5% relative to a model in which both effects are switched off. The CE accounts for most amplification, whereas the VE only plays a minor role.

This paper examines the factors influencing farmer participation in crop insurance schemes, but unlike previous studies that focus on total demand, participation is disaggregated into entrants and those exiting. Modeling entry and exit decisions separately illustrates that the effect of a given variable is often muted by aggregation. In addition, the approach in this paper distinguishes between price and yield variables rather than total returns and is consequently able to demonstrate that price variables are particularly important for farmers considering enrolling in crop insurance, while yield variables and other risk management opportunities are more important for farmers who have been in the program but are deciding to exit. The result suggests that moral hazard is reduced significantly by calculating the coverage yield level for an individual producer on the basis of a moving average of past yields for that farmer. While yield and its variance are particularly influential in the participation decision for farmers currently enrolled, its significant impact on the insurance decision for all farmers highlights the importance of crop insurance as a potential adaptation strategy to weather events.

This paper characterizes optimal monetary policy in an economy with endogenous firm entry, a cash-in-advance constraint, and preset wages. Firms must make profits to cover entry costs; thus the markup on goods prices is efficient. However, because leisure is not priced at a markup, the consumption–leisure trade-off is distorted. Consequently, the real wage, hours, and production are suboptimally low. Because of the labor requirement for entry, insufficient labor supply also implies that entry is too low. This paper shows that in the absence of fiscal instruments such as labor income subsidies, the optimal monetary policy achieves higher welfare under sticky wages than under flexible wages. The policy maker uses the money supply instrument to raise the real wage—the cost of leisure—above its flexible-wage level, in response to expansionary shocks to productivity and entry costs. This increases labor supply, expanding production and firm entry.

This paper focuses on localising network-specific market power in new markets. Three levels of transmission quality in service markets can be differentiated according to the products provided: narrowband services like PSTN/ISDN or GSM, semi high-speed broadband services, like broadband internet access up to 6 Mbps download, and VDSL services up to 50 Mbps. As long as a monopolistic bottleneck exists in local infrastructure networks due to the absence of alternative network infrastructures, the question arises what the remaining bottleneck components are for these different markets. In this paper, the shrinking bottleneck hypothesis will be demonstrated.