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The effect of crises on firm exit and the moderating effect of firm size

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  • Amorim Varum, Celeste
  • Rocha, Vera Catarina

Abstract

The liability of smallness assumption suggests that smaller firms face higher exit risks. However, does it apply during crises? We show that during downturns size reduces firms’ exit risk by less; the hazard rate increases more rapidly in size.

Suggested Citation

  • Amorim Varum, Celeste & Rocha, Vera Catarina, 2012. "The effect of crises on firm exit and the moderating effect of firm size," Economics Letters, Elsevier, vol. 114(1), pages 94-97.
    • Handle: RePEc:eee:ecolet:v:114:y:2012:i:1:p:94-97
    DOI: 10.1016/j.econlet.2011.09.015
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    References listed on IDEAS

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    More about this item

    Keywords

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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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