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Competition Policy and Exit Rates: Evidence from Switzerland

Author

Listed:
  • Buehler Stefan

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

  • Kaiser Christian

    (University of St. Gallen)

  • Jaeger Franz

    (University of St. Gallen)

Abstract

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.

Suggested Citation

  • 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.
    • Handle: RePEc:bpj:bejeap:v:contributions.4:y:2005:i:1:n:15
    DOI: 10.2202/1538-0645.1444
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    Cited by:

    1. Guimarães Barbosa, Evaldo, 2016. "Determinants of Small Business Survival: The Case of Very Small Enterprises of the Traditional Manufacturing Sectors in Brazil," MPRA Paper 72304, University Library of Munich, Germany.
    2. Burghardt, Dirk, 2013. "The Impact of Trade Policy on Industry Concentration in Switzerland," Economics Working Paper Series 1317, University of St. Gallen, School of Economics and Political Science.
    3. Buehler, Stefan & Kaiser, Christian & Jaeger, Franz, 2006. "Merge or fail? The determinants of mergers and bankruptcies in Switzerland, 1995-2000," Economics Letters, Elsevier, vol. 90(1), pages 88-95, January.
    4. Dirk Burghardt & Marco Helm, 2015. "Firm growth in the course of mergers and acquisitions," Small Business Economics, Springer, vol. 44(4), pages 889-904, April.
    5. Bruce Blonigen & Benjamin Liebman & Wesley Wilson, 2013. "Antidumping and Production-Line Exit: The Case of the US Steel Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(4), pages 395-413, June.
    6. Dmitri Nizovtsev & Alexandre Skiba, 2016. "Import Demand Elasticity and Exporter Response to Anti-Dumping Duties," The International Trade Journal, Taylor & Francis Journals, vol. 30(2), pages 83-114, March.
    7. Stefan Buehler & Christian Kaiser & Franz Jaeger, 2012. "The geographic determinants of bankruptcy: evidence from Switzerland," Small Business Economics, Springer, vol. 39(1), pages 231-251, July.
    8. Stefan Buehler & Christian Kaiser & Franz Jaeger, 2007. "On the Geographic and Cultural Determinants of Bankruptcy," SOI - Working Papers 0701, Socioeconomic Institute - University of Zurich, revised Jun 2007.

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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - 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

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