Abstract
We investigate the corpus of literature on firm exit by means of a systematic literature review (SLR) which yields a final sample of 142 journal articles for the period 1991–2020. The phenomenon of firm exit is explored from a variety of perspectives: business exit; exit at the individual entrepreneur level; exit from specific markets; exit from foreign markets; and the role of exit for industrial dynamics conceived more broadly. Special attention is given to the various exit routes, including voluntary liquidation, mergers and acquisitions (M&A), initial public offerings (IPO), and of course bankruptcy. The SLR sets the scene for the Special Issue papers that are presented towards the end, and we conclude with some suggestions for future research.The Plain English Summary This article develops a systematic literature review around three decades of firm exit research, patterns, developments, and intriguing gaps. In this paper, we systematically review 142 studies on firm exit from various perspectives, identify major patterns, and outline the debate around firm exit. We propose reflections useful for scholars willing to engage in firm exit research in the future and set the scene for the special issue papers. Overall, this work shows the remarkable progress made in the area of firm exit that has evolved from the view of exit as a homogenous event signaling failure to a vision of exit as a heterogenous event. Exploring the sources of heterogeneity of exits from various perspectives could offer promising paths for future research.
Highlights
Firm exit is a central topic of academic and economic interest, especially in periods of economic turmoil where exit can both shape (Guerrieri et al, 2020) and be shaped (Bartik et al, 2020) by wider macroeconomic dynamics
Some attempts to review this wide literature have been done in the past: literature reviews exist on exit in general (Parastuty, 2018) or with a focus on some aspects of exit such as divestitures (Decker & Mellewigt, 2007), entrepreneurial exit (Wennberg & DeTienne, 2014), and small business exit (Wennberg & DeTienne, 2014); or again, on firm survival (Josefy et al, 2017; Soto‐Simeone et al, 2020)
We find a literature review on firms’ exit by divestiture by Decker and Mellewigt (2007) that focuses on the antecedents of, barriers to, and outcomes of business exit as an important corporate change initiative that emphasizes that business exit should not be seen as an outcome of de-conglomeration, but rather as a part of strategic change and internal reconfiguration, bringing the attention on the seller’s side in a divestiture
Summary
Firm exit is a central topic of academic and economic interest, especially in periods of economic turmoil where exit can both shape (Guerrieri et al, 2020) and be shaped (Bartik et al, 2020) by wider macroeconomic dynamics. Others have instead studied the process of firm exit considering both internal and external forces (e.g., Bradley et al, 2011; de Figueiredo & Silverman, 2007; Leroy et al, 2015; Ebert et al, 2018; Schary, 1991) or where exit is seen as the complementary status of survival (e.g., Cefis & Marsili, 2005; Coad et al, 2013; Coad & Guenther, 2013; de Figueiredo & Silverman, 2012; Yang & Aldrich, 2012). The past decades have seen a blossoming of studies investigating the exit phenomenon through the concept of “firm exit.”. This has led to a rather splintered and fragmented understanding of the concept. The need for a review and clarification is especially urgent, especially in the current economic period where firm exit is becoming a core theme
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