ENTRY ORDER, PERFORMANCE, AND GEOGRAPHY: THE CASE OF THE CONVENIENCE‐STORE INDUSTRY IN JAPAN

Abstract Entry‐order effects on economic profits have not been extensively studied due to data limitations. This article empirically examines these effects on revenues and costs using a structural approach without requiring information on accounting profits and costs. Utilizing panel data from Japan's convenience‐store industry, I apply a two‐step estimator for many geographic markets. The results reveal that whereas early entrants gain 4.8% more revenue at the outlet level, subsequent entrants benefit from a 7.6% and 5.8% reduction in variable and expansion costs. Simulations suggest initial benefits from delayed entry, but these may dissipate over time, particularly in rapidly growing markets.