Standing in the Shadow of the Giants - Conditions for Entry and Survival of Small Businesses on the Deregulated Bus and Railway Markets in Sweden

Abstract

Since the late 1980s, the entry barriers for new bus and railway companies have gradually been reduced in Sweden. In this paper the effects of these changes upon small businesses are analysed with the help of a couple of case study firms. Four parts of the transportation sector are considered: local and regional bus services, long-distance bus services, regional train services and inter-regional train services. Although offering different basic conditions for entry, new as well as old small businesses have often faced a common problem on each of these markets: having to compete with a giant former monopolist or oligopolists, or being dependent on some of its/their factors of production. Although several firms have been forced out of the markets, a number of them have managed to survive and grow. In this paper it is argued that there are a few key factors that govern a small firm’s success or failure.