Institutional and financial entry barriers in a fishery

Fishery policies over the past decades have mainly aimed at capacity reduction to preserve overexploited stocks. For that reason, research has focused on exploring incentives exit fisheries rather than examining entry barriers. However, in quota-regulated fisheries, potential entrants might face substantial institutional and financial barriers, as opposed incumbents, whose rights been historically secured by grandfathering or acquiring quota shares favorable prices. The present study first explores barriers for a entrant Norwegian purse seine fleet. findings show there exist legal overcome. Furthermore, capital requirement of about 100 million USD is needed. About two-thirds this significant amount related purchases. Second, based empirical catch price data, examines prospects newcomer make profit from vessel investment relative an incumbent with free capacity. can achieve 40% higher return investing unit intruder. This different valuation clearly demonstrates economic disadvantage being outsider. Consequently, intruders are excluded competing thus entering industry. Finally, implications discussed.