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Ratio Working Paper No. 195 What determines entry? Evidence from Sweden Niklas Elect* *Niklas.elect ratio.SE, The Ratio Institute, P.O. Box 3203, SE103 64 Stockholm, Sweden, and Department of Economics,
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These data and the theoretical framework of the analysis of entry are therefore analyzed in these papers in the light of the theories of entry, industrial organization and political economy developed thus far. Entry and establishment are studied using indicators of factors that govern the establishment and the establishment of firms at different levels. These indicators are related to factors in the labor market such as labor market skill and skill quality, industry and industry characteristics, the development of business institutions and competition as well as to the size of firms. The analysis also considers the impact of the entry process on productivity and wages. The empirical results show that firm size, which influences entry but not establishment, is mainly determined by the size of firms in the firms' manufacturing sector and is unrelated to the size of the country's industrial sector. However, entry and establishment are affected by business establishment and by the composition of businesses operating in the country. The size of industries, however, is strongly associated with the size of firms. In relation to the factors controlling the size of firms, business firm size, industrial concentration and the concentration of industry in smaller firms are the most influential factors regarding firm size. The importance of industry composition for firm size increases with large firms, as the firm size of small firms drops for similar firms in larger industries, but that of large firms increase. This relation between concentration and firm size is significant for the establishment of a firm but not for the entry of a firm and is explained by the fact that firms in different industries tend to start in different industries. The importance of skill among the factors that influence the success or failure of firms is explained by firms that are less competent to compete than in the same industry, and by firms that are more dependent on their knowledge about competitive activities. The importance of business firm size is also explained by the fact that companies with higher productivity have more employees and are thus more likely to have a smaller firm. But the importance of firm size increases with the number of employees, for example, if firms are large and have a lot of employees, a low average productivity may result in a firm with many employees. The importance of skill among the factors that influence the success or failure of firms also depends, however, on the size of the employers who employ these companies. As can be seen, entry and establishment do significantly differ but the importance of the factors regulating entry and establishment varies across the different countries studied. They are significantly related to industrial structure, with the proportion of firms in the manufacturing sector the most influential factor.

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What determines entry evidence is a set of criteria or documentation that an individual or entity must provide in order to establish their eligibility or qualifications for entry into a specific program, opportunity, or jurisdiction.
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