Surviving Globalisation

University of Nottingham Research Paper Series No. 2005/19

35 Pages Posted: 4 Aug 2005

See all articles by David Greenaway

David Greenaway

University of Nottingham - School of Economics

Joakim Gullstrand

Lund University - School of Economics and Management

Richard Kneller

University of Nottingham

Date Written: 2005

Abstract

This paper investigates the effects of international trade on firms' exit decision in Sweden, where exit can be by closedown, switching industry or being acquired. We find that higher levels of international competition increases the probability of exit by merger and closedown compared to no change. If trade is intra-industry in character the effect of import penetration on the probability of exit mitigates. The probability of exit by switching industry is higher in industries characterised by comparative disadvantage. Finally, we find the origin of international competition is significant; the effects are strongest when trade is with OECD countries.

Keywords: Industry dynamics, international trade, exit, closure, merger

JEL Classification: D21, F10, L20, L6

Suggested Citation

Greenaway, David and Gullstrand, Joakim and Kneller, Richard, Surviving Globalisation (2005). University of Nottingham Research Paper Series No. 2005/19. Available at SSRN: https://ssrn.com/abstract=765110 or http://dx.doi.org/10.2139/ssrn.765110

David Greenaway (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
+44 115 951 5469 (Phone)
+44 115 951 4159 (Fax)

Joakim Gullstrand

Lund University - School of Economics and Management ( email )

Tycho Brahes väg 1,
S-220 07 Lund, 223 63
Sweden

Richard Kneller

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

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