Does State Antitrust Enforcement Drive Establishment Exit?
Previous work has shown that state-level antitrust enforcement activity may have impacts on entry and relocation behavior by U.S. firms. Significant state-level antitrust activity may be an indicator of a perceived adverse business environment and it is found to deter establishment entry, particularly for larger firms in the retail and wholesale sectors. An obvious question is whether establishment exit is affected in a symmetric way, or whether sunk costs of market entry may lead to a smaller impact in terms of the exit decisions. We first combine US Census establishment exit panel data with data for 1998-2006 on US state-level antitrust activity and other measures of state-level business activities that may affect establishment exit. We also consider establishment exit across different broad industry types -- manufacturing, retail and wholesale -- and several firm size categories. Local business cycle factors seem to be the primary driver of exit, though there is some evidence of political and antitrust determinants as well. In another approach, we examine firmlevel exit decisions and the extent to which these respond to state antitrust enforcement, with some indication of antitrust enforcement effects here as well, especially in the wholesale and retail sectors.
|Date of creation:||2013|
|Contact details of provider:|| Postal: Mohrenstraße 58, D-10117 Berlin|
Web page: http://www.diw.de/en
More information through EDIRC
References listed on IDEAS
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.:
- Barry T. Hirsch & David A. MacPherson, 2003. "Union Membership and Coverage Database from the Current Population Survey: Note," ILR Review, Cornell University, ILR School, vol. 56(2), pages 349-354, January.
- Feinberg, Robert M, 1980. "Antitrust Enforcement and Subsequent Price Behavior," The Review of Economics and Statistics, MIT Press, vol. 62(4), pages 609-12, November.
- Vinod Sutaria & Donald A. Hicks, 2004. "New firm formation: Dynamics and determinants," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 38(2), pages 241-262, 06.
- David Audretsch, 1994. "Business Survival and the Decision to Exit," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 1(1), pages 125-137.
- Dunne, T. & Roberts, M.J. & Samuelson, L., 1988.
"Pattenrs Of Firm Entry And Exit In U.S. Manufacturing Industries,"
1-88-2, Pennsylvania State - Department of Economics.
- Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter.
- Richard Kneller & Danny McGowan, 2012.
"Tax Policy and Firm Entry and Exit Dynamics: Evidence from OECD Countries,"
12006, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
- Ricjard Kneller & Danny McGowan, "undated". "Tax Policy and Firm Entry and Exit Dynamics: Evidence from OECD Countries," Discussion Papers 12/01, University of Nottingham, School of Economics.
- Richard Kneller & Danny McGowan, "undated". "Tax Policy and Firm Entry and Exit Dynamics: Evidence from OECD Countries," Discussion Papers 11/08, University of Nottingham, School of Economics.
- Guido Buenstorf, 2006.
"Evolution on the Shoulders of Giants: Entrepreneurship and Firm Survival in the German Laser Industry,"
Papers on Economics and Evolution
2005-20, Philipps University Marburg, Department of Geography.
- Guido Buenstorf, 2007. "Evolution on the Shoulders of Giants: Entrepreneurship and Firm Survival in the German Laser Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(3), pages 179-202, May.
- Robert M Feinberg, 2013. "International Competition and Small-Firm Exit in US Manufacturing," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 39(3), pages 402-414.
When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp1323. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek)
If references are entirely missing, you can add them using this form.