DETERMINANTS OF ENTRY AND EXIT RATES IN AUSTRALIAN INDUSTRY

Evgeni Genchev

Аннотация


The study of factors, affecting industrial dynamics of entry of some or exit of other companies has been an object of interest within the academic community for many years.

Market selection process incorporates entry and exit as key elements, crucial for the restructuring and evolution of an industry. The constant firm entry and exit in competitive markets indicate a successful and dynamic economy.

Such research has been conducted in various countries, for example the USA, Canada, and some European countries. The object of study in this publication is the economy of Australia.

The goal is to examine the influence of some specific factors, such as profitability, capital expenses, value added and market demand on the entry (or exit) of firms in (from) a specific economic sector.

This study uses a large panel of businesses, drawn from administrative data provided from the Australian Bureau of Statistics (ABS), which allows us to track firms over the five years from 2008 to 2012.

Our findings show that the examined industrial factors have varying extents and directions of influence on the entry and exit of companies in different sectors. Some of them, such as the level of profit are significant for the shares of both entering and exiting firms. As a whole, the determinants at the entry of industries are more and stronger in effect, than those at the exit. 

Keywords:

entry, exit, industry dynamics, determinants, Australian industry.


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