Abstract
Over the past decades, exit has been analyzed at the theoretical and empirical levels. From this rich series of contributions, two basic patterns of exit can be identified: the revolving door and the gale of creative destruction. In the first, the liability of newness plays a major role in the exit process, while in the second the displacement of non-innovators is the driver of exit. We have tested these two patterns of exit on the population of Dutch firms that exited in 2018. We find confirmation that the two patterns characterize different types of industries. In industries in which innovation does not play a major role, the revolving door effect is the typical pattern and exit is concentrated among the adolescent firms. These firms are also small in size. On the contrary, in industries in which innovation plays a role, exit takes place both among infant as well as mature firms. Exiters are not necessarily only the smaller firms. While a highly innovative and uncertain environment can threaten the survival of infant firms, the exit of mature firms is driven by the innovation of young firms, following the gale of creative destruction.
| Original language | English |
|---|---|
| Pages (from-to) | 1465-1494 |
| Number of pages | 30 |
| Journal | Journal of Evolutionary Economics |
| Volume | 31 |
| Early online date | 8 Oct 2020 |
| DOIs | |
| Publication status | Published - 30 Nov 2021 |
Funding
The authors thank Alessandro Lucini-Paioni for precious research assistance, and the participants at the International ICC Conference: Beyond Technological Innovation and Diffusion. University of Berkeley, Berkeley, CA, U.S.A., December 11-14, 2016; and at the Workshop in honor of Luigi Orsenigo on December 5-6, 2018, at ICRIOS, Bocconi University, Milan, Italy, for fruitful discussions. The empirical part of this research was carried out at Microdata ? Centraal Bureau voor Statistiek (CBS), the Netherlands. The views expressed in this paper are those of the authors and do not necessarily reflect the policies of Statistics Netherlands. Elena Cefis acknowledges financial support from the University of Bergamo (grants n. 60CEFI18 and n. 60CEFI19, Dept. of Management, Economics, and Quantitative Methods). Elena Cefis has received research grants from the University of Bergamo, Dept. of Management, Economics, and Quantitative Methods, Bergamo, Italy: grants n. 60CEFI18 and n. 60CEFI19.
Keywords
- Creative destruction
- Firms’ exit
- Innovation
- Revolving doors
ASJC Scopus subject areas
- General Business,Management and Accounting
- Economics and Econometrics