Competition Policy and Exit Rates: Evidence from Switzerland
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.
|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|
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