Disincentives to market entry

Although liberalization of regulatory barriers increases opportunities for competition, such liberalization does not suffice to overcome other disincentives to market entry. Domestic markets in most developing countries are usually highly concentrated, because the level of demand in these markets can sustain only relatively few firms producing on a minimum economic scale. Other disincentives to entry of firms into a market include the limited availability of entrepreneurs and of production inputs, inefficient distribution and communication systems and poor information flows.