Live Or Let Die? Alternative Routes to Industry Exit
University of Nottingham Research Paper No. 2007/10
36 Pages Posted: 15 Feb 2007
Date Written: 2007
Each year around 8 per cent of Swedish manufacturing firms leave an industry. Of the exit routes available, the least likely is firm closure. Firms are more likely to merge, become acquired or switch to a new industry. We investigate the importance of various firm and industry characteristics for the exit decision of Swedish firms from 1980-1996. From our analysis two patterns are evident. First, firms that close down appear to be the most distinct compared to those that remain within the sector. Second the same characteristic can have quite different associations with the different types of exit.
Keywords: Firm exit, productivity, resource reallocation
JEL Classification: L10, L21, L25, L60
Suggested Citation: Suggested Citation