In the morning of June 9, 2020, the Faculty of Business Administration successfully held a journal seminar. Dr. Pham Tien Thanh (a lecturer of FBA) presented an article: “Do entry barriers reduce productivity? Evidence from a natural experiment” (by Danny McGowan, Bangor University). The seminar welcomed the attendance of all faculty lecturers.
Literature documents of the article demonstrated that entry barriers create resource misallocation and reduces incumbent firms’ innovation incentives, leading to low productivity. Therefore, eradication of entry barriers can enhance aggregate productivity by: increasing competition, fostering incumbent firms’ creativity and new entrants' adoption of new technologies, products and processes. This examined the effects of entry barriers on productivity by exploiting the collapse of the US sugar cartel. Using difference-in-difference approach, this study finds that the removal of entry barriers significantly enhances productivity among the sugar industry. Finding implies that deregulation of entry barriers plays an important role in market economy.
At the end of the seminar, participants discussed further the difference-in-difference approach including its limitations in specific cases.
Photos of the seminar:
