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Competition Policy and Exit Rates: Evidence from Switzerland

  • Stefan Buehler

    ()

    (Socioeconomic Institute, University of Zurich)

  • Christian Kaiser

    ()

    (University of St. Gallen)

  • Franz Jaeger

    ()

    (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 towards analyzing 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 nonexporting 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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File URL: http://www.soi.uzh.ch/research/wp/2004/wp0405.pdf
File Function: Revised version, 2005
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Paper provided by Socioeconomic Institute - University of Zurich in its series SOI - Working Papers with number 0405.

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Length: 24 pages
Date of creation: Mar 2004
Date of revision: Apr 2005
Publication status: Published in Contributions to Economic Analysis and Policy 4(1), 2005, Article 15
Handle: RePEc:soz:wpaper:0405
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  1. Harhoff, Dietmar & Stahl, Konrad & Woywode, Michael, 1996. "Legal Form, Growth and Exit of West German Firms - Empirical Results for Manufacturing, Construction, Trade and Service Industries," CEPR Discussion Papers 1401, C.E.P.R. Discussion Papers.
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  9. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-61, April.
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  15. Agustí Segarra & Maria Callejón, 2002. "New Firms' Survival and Market Turbulence: New Evidence from Spain," Review of Industrial Organization, Springer, vol. 20(1), pages 1-14, February.
  16. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-45, September.
  17. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
  18. Konings, Jozef & Ana Xavier, 2003. "Firm Performance and Selection in an emerging Economy: Micro Evidence from Slovenia," Royal Economic Society Annual Conference 2003 127, Royal Economic Society.
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