Study On The Effect Of Entry And Exit Barrier Upon Cluster Market Performance

With the development of specialization and the agglomeration of produciton fators,there are various enterprise clusters in the form of specialization township emerging all around our country. Unfortunately excessive competition is yet common in these specialization townships. Zhongshan Guzhen lighting Specialization Township is a special case of them while the level of competition in the natitional lighting industry is moderate. In 2006, the turnover of Zhongshan guzhen lighting industry has already taken up 70% of the total turnover of the whole country. However, most of the enterprises are struggling in product competition with a bad brand effect. And imitation is common and severe. Although a few firms exit for bankruptcy, more firms enter aggressively. As a result, the scale of firm is hard to form.With the entry conditions lower and exit barrier higher caused by the features of our cluster, there are many firms but the scale is low and the total turnover of cluster takes a big share in natitional market but firm lakes of competiveness. On the contrary, some of the non-cluster firms already have an effect of scale. Consequently the study aims to probe why our clusters have difficulties in forming the economic-scale firms endogenously.Accordingly,To reach this aim, after the review of relevant paper, I try to point out the features of entry and exit barrier in our enterprise cluster and study on the "crowding-out effect" and "business stealing effect" caused by these feautures using economic models and the different influences on market performance in the different stage of cluster. I conclude that artificially extend or diminish the barrier is harmful when cluster is growing fast. Besides, I analyse the result of quality differentiation as an entry-deterrence strategy with a three-stage game theory model. I take the Zhongshan guzhen lighting Specialization Township as a case to make empirical research and give some suggestion as to the behavior of enterprise and the role of government.