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Bankruptcy and Voluntary Liquidation : Evidence for New Firms in East and West Germany after Unification

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Author Info
Prantl, Susanne
Abstract

Exploiting the unique economic situation after German unification, I investigate how exit decisions deviate between new firms in a transition and a comparatively stable market environment. Two competing exit mechanisms are considered: entrepreneurial self-selection via voluntary liquidation and external selection based on insolvency regulation. Distinguishing between the competing exit modes proves to be crucial in semi-parametric propor- tional hazard-rate estimations. Comparing East and West Germany, I find distinct education and size effects and a higher share of bankruptcy-related liquidations in East Germany. These results are argued to reflect different industry structures, capital and labor market conditions in both parts of Germany. --

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 03-72.

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Date of creation: 2003
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Handle: RePEc:zbw:zewdip:1682

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Related research
Keywords: Exit; Bankruptcy; Voluntary Liquidation; Transition Economy; Duration Analysis;

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Find related papers by JEL classification:
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General
P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. S. Balcaen & S. Manigart & H. Ooghe, 2009. "From distress to exit: determinants of the time to exit," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/588, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]
    Other versions:
  2. Bettina Müller, 2006. "Human Capital and Successful Academic Spin-Off," Working Papers of the Research Group Heterogenous Labor 06-14, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim. [Downloadable!]
  3. S. Balcaen & J. Buyze & H. Ooghe, 2009. "Financial distress and firm exit: determinants of involuntary exits, voluntary liquidations and restructuring exits," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/598, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]
    Other versions:
  4. Metzger, Georg, 2006. "Afterlife ? Who Takes Heart for Restart?," ZEW Discussion Papers 06-38, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  5. Müller, Bettina, 2006. "Human capital and successful academic spin-off," ZEW Discussion Papers 06-81, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  6. Fier, Andreas & Heneric, Oliver, 2005. "Public R&D Policy: The Right Turns of the Wrong Screw? The Case of the German Biotechnology Industry," ZEW Discussion Papers 05-60, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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