ABSTRACT
The concept of a ‘barrier to entry’ is more subtle than it appears to be at first sight. It has proved to be surprisingly difficult to uncover a definition of entry barriers (and more generally, of mobility barriers) that both commands wide acceptance in the profession and is empirically useful. Several alternatives have been proposed, and, in what follows, we summarize some of the more popular candidates. These definitions differ according to their emphasis on the structural characteristics of entry, the consequences of entry for economic performance, and the value of incumbency. While most of the early literature on barriers has focused on impediments to the entry of new capital into a market, we adopt the more general perspective of Caves and Porter [1977] who argue that economic performance depends on limitations to the movement of resources into, out of, or within an existing industry. Thus, we choose to use the more general term of ‘mobility barriers.’
