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Competition Policy and Exit Rates: Evidence from Switzerland

  • Buehler Stefan

    ()

    (University of Zurich, University of St. Gallen, and ENCORE)

  • Kaiser Christian

    ()

    (University of St. Gallen)

  • Jaeger Franz

    ()

    (University of St. Gallen)

This paper provides evidence on the relation between the intensity of product-market competition and the probability of exit. We adopt a natural experiment approach to analyze 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 non-exporting 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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Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 4 (2005)
Issue (Month): 1 (November)
Pages: 1-30

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Handle: RePEc:bpj:bejeap:v:contributions.4:y:2005:i:1:n:15
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