Strategy, scale or policy? Exit in the Australian car industry

This paper estimates the importance of strategy, scale and policy in determ ining the pattern of exit in the Australian car industry. Previous studies found only a weak role for strategy in exit from declining industries. Usin g a new dataset and improvements on the specification used in earlier studi es, we find evidence that strategy influences the pattern of exit where eco nomies of scale are less important. Protection is also found to negatively influence the likelihood of exit.