abstract
This paper examines exit behaviour of small firms by using data from The Survey of Retirement of Small Firm Managers, which provides information on exit and post-exit behaviour of Japanese small firms and their managers. First, it is shown that small firm exits occur not just because of economic difficulties in their business (‚economic-forced exit’) but also for various other reasons (‚non-economic-forced exit’). Logit estimates show that the probability of economic-forced exit is significantly higher if the manager is relatively young and male, the firm has loans from a financial institution, its sales are tending to decrease, and so on. It is also shown that a rather large proportion of managers continue to work after exit, and this proportion, especially that of employed workers, is higher in the case of economic-forced exits. These results indicate the potential importance of distinguishing these two classes of exits in exit studies.
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Acknowledgements
This research was partly undertaken while I was taking part in a research group at the Research Institute of Economy, Trade and Industry (RIETI). I thank Masaru Yoshitomi, Toshiaki Tachibanaki, Takehiko Yasuda, Shigeru Matsushima, Eiji Takeuchi, Kazuyuki Motohashi, Hiroyuki Okamuro, Yuji Honjo, Hideo Okamura, Yuji Hosoya, Iichiro Uesugi, Kouichi Hoshino, seminar participants at Kyoto Sangyo University and the RIETI, and three anonymous referees for helpful comments and suggestions on earlier version of this paper. This research is partly supported by a Grant-in-Aid for Scientific Research, 17730200.
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Harada, N. Which Firms Exit and Why? An Analysis of Small Firm Exits in Japan. Small Bus Econ 29, 401–414 (2007). https://doi.org/10.1007/s11187-006-9001-6
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DOI: https://doi.org/10.1007/s11187-006-9001-6