WHAT ARE THE ENTRY BARRIERS PERCEIVED BY THE INDUSTRIAL COMMUNITY?

Abstract

Entry barriers have been a widely explored area of study by industrial economists in the West like the United States and Europe. The study of entry barriers has blossomed in both theoretical and empirical fronts. Despite widespread attention given to this branch of Industrial Organisation (IO), it is not a particularly well received or popular topic in Asia. A wide body of literature on this topic is based on theories formed in the West. This thesis attempts to find out more about entry barriers or more specifically, entry deterrence strategies in the Singapore industries. Since data on the entry deterrence strategies used by firms in Singapore are not available, a survey is undertaken to uncover the strategic entry barriers faced by the local industrial community. This survey is modelled after a similar one done more than a decade ago in the U.S. by Robert Smiley. The questions were modified to make them more relevant to the Singapore industries and new questions were added to investigate other aspects of entry barriers which were not included in Smiley's questionnaire. The thesis is divided into five chapters. The first chapter will give a literature review of the study of entry barriers. The definitions and sources of entry barriers will be examined. Chapter 2 will examine entry barriers in the context of Singapore. Business strategies and conduct pertaining to entry deterrence actions will be discussed and these may be of interest to the local business managers, the 10 economists and students. The way the survey was conducted, the difficulties encountered and the aims of the survey will also be presented in this chapter. Chapter 3 is an analysis of the survey results. Questions like which strategies are most frequently used and which industries tend to deter entry will be answered with respect to the data collected. The analysis of the results will continue into the next chapter. Chapter 4 deals with the condition of entry in different economies; it compares the ease/difficulty of entering the economy's industry relative to entry into the Singapore industries. Five regions are chosen for comparison. The impact of a recession or boom on entry barriers will also be explored. Chapter 5 will be a summary of the survey results and their implications on the government and local business managers.