jeffrey robinson

 assistant professor
 leonard n. stern school of business
 management and organizational behavior department
 tisch hall-7th floor,  40 west 4th street
 new york, new york 10012-1119


an economic sociology of entry barriers

    dissertation related research

an economic sociology of entry barriers:  business entry and the inner city market


entrepreneurship theorists concern themselves with important questions about the evaluation of business opportunities.  how is an opportunity evaluated?  why do some entrepreneurs see business opportunities where others do not?

in this dissertation, i propose a theory of social and institutional entry barriers to explain these differences for inner city markets. to summarize, i argue that inner city markets pose a challenge for business managers and entrepreneurs because many do not understand how to address significant social and institutional factors.  these factors influence the structure of business opportunities in inner cities.  it is the structures around the business opportunity that make the inner city business opportunities different from other business opportunities.  business opportunities in the inner city markets are more influenced by these social and institutional forces than the traditional market and therefore different business strategies are necessary to address them.

secondly, i theorize about the relationship between the entry strategy and the performance of the firm.  business strategy in inner city markets will follow patterns consistent with overcoming social and institutional entry barriers.  in other words, those entrepreneurs whose background and experience give them superior knowledge and capabilities within an inner city market will build more successful firms than those with out this knowledge and capabilities.  the entrepreneurs that build firms more adept at overcoming social and institutional barriers to the inner city market will be more successful than those without.
the contribution of this dissertation to entrepreneurship theory is its use of the lens of economic sociology to define how the existence of ‘social’ and ‘institutional’ entry barriers structures the business opportunities of inner cities.  these types of entry barriers influence the decision to enter a new market and the entry strategy chosen for inner city markets.

entry barriers to new markets have been classically defined in terms of cost advantages, product differentiation, capital requirements, switching cots, and access to distribution channels.  (porter 1980; karakaya & stahl 1991)  these types of barriers, however, do not explain the breadth of challenges and opportunities afforded to firms seeking to enter new markets.

i make the case in this dissertation that entry barriers fall into three categories. traditional entry barriers described bain (1956) and porter (1980) conform to the classic economic barriers described above.  these economic barriers, originally intended to explain aspects of industry structure, have been extended to explain competition in market structure.  to this economic entry barrier, i add two dimensions: social and institutional entry barriers.  social entry barriers such as networks of resources and access to appropriate workforce are related to the social structure of the market.  institutional entry barriers such as political stability, order, norms, and values, are related to the institutional structure of the market.

i borrow the concept of embeddedness (granovetter 1985, 1992) from economic sociology to explore how both social and institutional entry barriers influence the decision to enter new markets and the entrance strategy.  to this end, i theorize how these economic decisions can be embedded within the social and institutional structure of the market.  this theory broadens the concept of entry barriers to explain why firms that are able to overcome economic entry barriers may not successfully enter new markets.

this dissertation develops propositions concerning the nature of business opportunity and business entry in inner city markets.  i ask three important questions.  first, what factors influence the decision to enter for firms interested in entering inner city markets?  second, for those that enter, what is the relationship between these entry barriers and the entrance strategies they use to enter?  third, how do these entrance strategies relate to firm performance?  i employ three different research methodologies to answer these questions:  interviews, vignettes, and survival analysis of empowerment zone data.

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read the prologue

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social and institutional barriers to  market entry

with gregory b. fairchild, university of virginia
this theory-development paper proposes a two-stage framework for examining deterrents to market entry. we argue that the decision to enter a new market is a clear example of a firms decision to exploit an opportunity. we propose that managers take into account barriers beyond those cited in structural analyses of markets (e.g., scale economies, intensity of rivalry, power of suppliers, power of buyers, and availability of substitutes), and that these barriers often deter the entry of potentially-viable competitors into markets. further, we argue that these frictions to entry are widespread, but receive less attention because they are harder to value in most product markets. the paper first proposes a framework and then uses urban new markets to illustrate the ideas proposed. the final section of the paper proposes directions for future research.

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dissertation committee


paul ingram, ph.d. columbia business school

eric abrahamson, ph.d. columbia business school


ray reagans, ph.d  columbia business school

sudhir venkatesh, ph.d.  columbia sociology  

jpt     j. philip thompson, ph.d  mit urban studies

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dissertation proposal document pdf

social and institutional barriers to market entry pdf   figures doc

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updated june 18, 2003            contact                     back to  dissertation  research     home

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