Do Incumbents' Mergers Influence Entrepreneurial Entry? An Evaluation. (May 2014)

• Record Type: Journal Article
• Authors: Majumdar, Sumit K.; Moussawi, Rabih; Yaylacicegi, Ulku
• Is Part Of: Entrepreneurship theory and practice. Volume 38:Number 3(2014:May)
• Page Start: 601
• Page End: 633
• Publication Date: 2014-05
• Subjects: Small business -- Periodicals; New business enterprises -- Periodicals; Entrepreneurship -- Periodicals; 658.421
• DOI: 10.1111/etap.12015
• Languages: English
• ISSNs: 1042-2587

Abstract

This analysis has evaluated the impact of mergers on new entrepreneurial firm entry in the territories of firms making up the local exchange sector of the United States telecommunications industry. An analysis of first and second mergers undertaken by the local exchange companies has revealed that where mergers occurred there was significantly lower entrepreneurial entry. The results have implications for policy, since the approval of mergers has been shown to lead to lower entrepreneurial entry where mergers occur, and the approval of mergers may serve to impede entrepreneurship. Hence, greater thought should be given to merger approvals so that entrepreneurship and the process of economic growth are not compromised as a result.