E

E^*_it = f (B_i,t, X_i,t-1, H_i,t-1, p _i,t-1, A_i,t-1)

De novo market entry sub i(market), sub t(year) is a function of legal barriers to entry sub i(market), sub t(year), exogenous market characteristics sub i(market), sub t(year minus one), expected future market concentration sub i(market), sub t(year minus one), pre-entry profits sub i(market), sub t(year minus one), and future profits from out-of-territory and merger activity sub i(market), sub t(year minus one).