Competition Policy and Exit Rates: Evidence from Switzerland
AbstractThis paper provides evidence on the relation between the intensity of product market competition and the probability of exit. We adopt a natural experiment approach towards analyzing the impact of a tightening of Swiss antitrust legislation on exit probabilities. Based on a sample of more than 68,000 firms from all major sectors of the Swiss economy, we find that the exit probability of nonexporting firms increased significantly, whereas the exit probability of exporting firms remained largely unaffected. Our results support the notion that there is a positive relationship between the intensity of product market competition and the probability of exit.
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Bibliographic InfoPaper provided by University of Zurich, Socioeconomic Institute in its series Working Papers with number 0405.
Length: 24 pages
Date of creation: Mar 2004
Date of revision: Apr 2005
Publication status: Published in Contributions to Economic Analysis and Policy 4(1), 2005, Article 15
competition intensity; exit; natural experiment;
Other versions of this item:
- Buehler Stefan & Kaiser Christian & Jaeger Franz, 2005. "Competition Policy and Exit Rates: Evidence from Switzerland," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-30, November.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-02-12 (All new papers)
- NEP-COM-2006-02-12 (Industrial Competition)
- NEP-IND-2006-02-12 (Industrial Organization)
- NEP-MIC-2006-02-12 (Microeconomics)
- NEP-TID-2006-02-12 (Technology & Industrial Dynamics)
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