, Volume 38, Issue 2, pp 281-304
Date: 28 Feb 2009

A competing risks analysis of firms’ exit

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Firms may exit the market in several ways and each form of exit is likely to be caused by different factors (Schary in RAND J Econ 22:339–353, 1991). This paper explores the determinants of different exit routes. Using a sample of Spanish manufacturing firms for 1990–2000, we estimate a competing risks proportional hazards model to identify the factors leading firms to exit the market through (the mutually precluding events of) liquidation/bankruptcy and acquisition/merger. Our results show the existence of a sharp difference between the determinants of these two exit routes in terms of firm and industry characteristics.