Final answer:
State laws for securities registration are called blue sky laws, which prevent investment fraud. Additional government and non-government barriers to market entry can range from licensing restrictions to owning unique resources. Regulations balance protection with market competition.
Step-by-step explanation:
State laws concerning the registration and issuance of securities are known as blue sky laws. These laws are designed to protect investors against fraud by regulating the sale of securities and ensuring that companies disclose important financial information.
The term "blue sky laws" stems from the intent to curb speculative schemes that have no more basis than so many feet of "blue sky."
In addition to state regulations, the Federal Securities Act established on May 27 set legal standards for disclosure which led to the creation of the Securities and Exchange Commission (SEC) to oversee the securities industry.
Governance barriers to entry include situations like a city stating how many licenses it will issue for taxicabs, which would limit competition because only a certain number of companies can operate legally.
Regulations requiring taxicab drivers to pass a driving safety test and have insurance are also forms of government-enforced barriers, aimed at ensuring safety and reliability.
Barriers not enforced by the government could include economic factors such as a well-known trademark or owning a unique resource like a spring with very pure water, which could deter new entrants because they cannot easily replicate such advantages.
Overall, regulations, including licensing requirements and safety and environmental standards, can act as informal trade barriers, potentially discouraging companies from entering certain markets due to stringent rules. The balance between regulation for protection and allowing free market competition is a constant dynamic in economics.