Monday, November 7, 2011
Posted by D. Daniel Sokol
Robert M. Feinberg (American University - Econ) and Thomas A. Husted explore PATTERNS OF ESTABLISHMENT ENTRY AND STATE-LEVEL ANTITRUST.
ABSTRACT: A large literature examines patterns of firm entry and relocation in response to local demand and cost parameters. Economists have studied tax incentives and local business conditions as drivers of business location decisions as well. In this article, we extend this analysis to consider the extent to which firms view state-level antitrust activity in the United States as an indicator of an adverse business environment, which in turn reduces that state's rate of establishment entry. We find some evidence of this effect, especially for larger firms and for more controversial types of antitrust enforcement.