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Strategy, Scale or Policy? Exit in the Australian Car Industry

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  • Matthew P. Fleischmann
  • David Prentice

Abstract

This paper estimates the importance of strategy, scale and policy in determining the pattern of exit in the Australian car industry. Previous studies found only a weak role for strategy in exit from declining industries. Using a new dataset and improvements on the specification used in earlier studies, we find evidence that strategy influences the pattern of exit where economies of scale are less important. Protection is also found to negatively influence the likelihood of exit.

Suggested Citation

  • Matthew P. Fleischmann & David Prentice, 2001. "Strategy, Scale or Policy? Exit in the Australian Car Industry," The Economic Record, The Economic Society of Australia, vol. 77(239), pages 351-360, December.
    • Handle: RePEc:bla:ecorec:v:77:y:2001:i:239:p:351-360
    DOI: 10.1111/1475-4932.00028
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    1. Gibson, John K & Harris, Richard I D, 1996. "Trade Liberalisation and Plant Exit in New Zealand Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 521-529, August.
    2. Robert Conlon & John Perkins, 1997. "Political Economy Of Assistance To The Automotive Industry In Australia: Have We Seen It All Before?," Economic Papers, The Economic Society of Australia, vol. 16(2), pages 76-91, June.
    3. Richard Ericson & Ariel Pakes, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(1), pages 53-82.
    4. Richard E. Caves, 1998. "Industrial Organization and New Findings on the Turnover and Mobility of Firms," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1947-1982, December.
    5. R.M. Conlon & J.A. Perkins, 1995. "Automotive Industry Policy In Australia: Origins, Impact And Prospects," Economic Papers, The Economic Society of Australia, vol. 14(3), pages 49-68, September.
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    Cited by:

    1. Lionel Bopage & Kishor Sharma, 2014. "Liberalization and Structural Change in Australian Automotive Industry: An Analysis of Trade and Productivity Performance: 1962–2008," Global Business Review, International Management Institute, vol. 15(3), pages 447-460, September.
    2. Sanidas, Elias & Jayanthakumaran, Kankesu, 2003. "Trade Reforms and the Survival of the Passenger Motor Vehicle Industry in Australia," Economics Working Papers wp03-10, School of Economics, University of Wollongong, NSW, Australia.
    3. Sanidas, Elias & Jayanthakumaran, Kankesu, 2006. "The Consequences of Trade Liberalisation on the Australian Passenger Motor Vehicle Industry," Economics Working Papers wp06-01, School of Economics, University of Wollongong, NSW, Australia.

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