The determinants of firm exit in Japanese manufacturing industries

This paper presents new evidence on the determinants of firm exits that occ urred in Japanese manufacturing industries over the period 1981-1989. Gross -number measure is used for exits. Many structural factors have exerted a d efinite influence on the extent of exit; across industries, capital intensi ty and subcontracting relationships have an exit-promoting effect, while pr ofits, industry growth, concentration, and R&D opportunity have a negative relationship with exit. In addition, the minimum efficient size has an inve rted-U-shaped relationship. However, export opportunity has only a marginal effect. These results are likely to reflect exits of small business.