Likelihood Of Exit Research Articles

Double‐edged stars: Michelin stars, reactivity, and restaurant exits in New York City

AbstractResearch SummaryThis article develops a theoretical framework to explicate how third parties, who are not transactionally involved in a given exchange relationship, can promote or impede the creation and capture of value by influencing market actor beliefs and behaviors. I investigate these issues empirically through an abductive mixed‐method case study of the Michelin Guide's entry into New York City. An examination of two decades of the openings and closings of New York City's elite restaurants indicates that receiving a Michelin star corresponded to an increased likelihood of restaurant exit. Michelin stars appear to have fostered disruptions at recipients' upstream and downstream interfaces, which inhibited their ability to capture value. This ultimately underscores how value network reactivity to third‐party evaluations may lead to unintended consequences for firms.Managerial SummaryThis article explains how third‐party evaluators' reviews, ratings, and rankings can promote or impede the creation and capture of value. This occurs because third‐party evaluations engender reactions by those being evaluated, as well as reactions by other market actors such as competitors and exchange partners. I study these issues within the context of the Michelin Guide's entry into New York City, and my findings indicate that restaurants that received a Michelin star were more likely to close in subsequent years. Evidence suggests that intensified bargaining problems with landlords, suppliers, and employees, along with heightened consumer expectations, created new challenges for these Michelin‐starred restaurants, which ultimately made it more difficult for them to stay in business.

What explains exit in Indian manufacturing industries?

PurposeThe purpose of this paper is to investigate the likelihood of firm exit, focusing on firm- and sector-specific factors and other potential constraints that may lead to exit.Design/methodology/approachThe authors address the main research question by using hazard-cox and probit models on plant level data for the period 1998–1999 to 2012–2013, drawn from the Annual Survey of Industries collected by the Central Statistical Organisation.FindingsThe authors find that probability of exit reduces with improved firm performance. Urban firms, proprietary firms and smaller firms are more likely to exit as compared with their respective counterparts. The findings are robust to alternate measures of performance, alternate specifications and different methods.Originality/valueStudies of entry and exit rates at a point in time are useful in examining the turnover of establishments. But to understand the establishment survival, the authors must also examine the probability of firm exit and the possible determinants that aid exit. There are institutional factors that prevent easy exit of firms from an industry. It would be worthwhile to see how the exit rate will be impacted if these barriers ceased to exist. In this study, the authors construct a model of exit, which would help us to predict firm exit.

Not all uncivil behaviours are equal: exploring responses to incivility in veterinary practice using vignettes

Workplace incivility is considered a common workplace stressor, linked to a range of adverse impacts such as reduced wellbeing. However, there is a lack of research focused on how targets of incivility respond. The current study addresses that gap by examining responses to incivility within veterinary practice. Veterinarians and veterinary nurses (n = 132) evaluated six scenarios depicting two types of incivility (direct e.g. demeaning comments/indirect, for example, ignoring someone) across three instigators (clients, co-workers, senior colleagues), reporting their perception and appraisal of the uncivil behaviour depicted along with potential responses. Direct incivility was linked to responses such as reciprocation, exit, and support seeking, whereas indirect incivility was associated with affiliative and ignoring responses. Negative appraisal of incivility predicted a higher likelihood of exit, avoidance, support seeking and reporting responses. These findings suggest that incivility targets utilise a broad range of response options and adapt their response dependent on the situation.

Climate change variability adaptation and farmers decisions of farm exit and survival in Pakistan

Pakistan is listed among the countries that are extremely vulnerable to climate changes and it has experienced several climatic and natural disaster shocks with adverse impacts on its agricultural sector and farmers livelihoods. This study investigates adaptation to climate change as a means of farm survival and farm exit in Pakistan by using panel datasets and empirically employs Multinomial Logit Model (MLN) and the Theory of Planned Behavior (TPB). The results reveal, first, farm experience significantly increases the likelihood of climate change adaptation and decreases the likelihood of farm exit. Second, land and livestock ownership both have positive and significant impact on farm survival with adaptation strategies and decrease the probability of farm exit. Third, climatic disasters have positive and significant impact on farm exit. Four, extension services have negative and significant impact on adaptation strategies and increase the probability of farm exit for those farms who did not receive climate change adaptation strategies information timely. Finally, TPB results illustrate that non-adapters climate change future intensions are affected by attitude, perceived behavioral control and subjective norms. The study findings bring scholars and policymakers attentions towards next level of climate change impact on farm exit, and are useful for farm survival and recruiting new farmers by promoting mixed-crop livestock production systems in the face of climate change, and during viral diseases such as Lumpy Skin Disease (LSD) of animals that caused a large number of animals deaths nationally and internationally.

Sickness absence and/or disability pension and future work income after age 65 and 70 in Sweden

Abstract Background As retirement ages are increasing in Europe, more knowledge is needed on factors that are associated with extended working life. Our aim was to explore if prior sickness absence (SA) and/or disability pension (DP) due to mental and/or somatic diagnoses were associated with income from work after age 65 and 70, respectively. Methods A 4-year prospective population-based cohort study using microdata from nationwide registers. We included all who in 2014 were aged 65-69 (cohort A; n = 201,263) and ≥70 (cohort B; n = 93,751), respectively, had income from work in 2014 (baseline), and lived in Sweden in 2010-2015. Cox proportional hazard regression was used to calculate hazard ratios (HR) with 95% confidence intervals (CI) for associations between prior SA (in spells >14 days) and/or DP due to mental and/or somatic diagnoses, overall and stratified by the number of net days (2010-2014), and future years with income from work (2015-2018), censored for death and emigration, adjusted for sociodemographic and work-related factors, and stratified by sex. Results The majority had no SA or DP during the exposure interval (cohort A 66.3% women, 75.8% men; cohort B 96.8% women, 97% men). Many had income from work at some point during follow-up (cohort A 77.8% women, 81.6% men, cohort B 81.9% women, 83.4% men). Prior somatic SA/DP was associated with a marginally but significantly higher HR for earlier exit from paid work in cohort A (women 1.08; 95% CI: 1.06-1.10; men 1.10; 1.08-1.12), lower HR for men in cohort B (0.93; 0.86-0.99), and non-significant HR for women in cohort B. The corresponding association for mental SA/DP was significant only for women in cohort A (1.09; 1.06-1.13). Conclusions The likelihood of earlier exit from paid work was slightly higher for those aged 65-69 at baseline with prior somatic SA/DP, but lower for men aged ≥70 at baseline with prior somatic SA/DP. Prior mental SA/DP was associated with earlier exit only for women aged 65-69 at baseline. Key messages • Prior SA/DP was in many cases marginally but significantly associated with future income from work. The direction of association differed depending on the diagnosis of the spell, cohort and sex. • More knowledge is needed on how older workers with different types of morbidities and functional limitations can extend their working life in Sweden as well as in other European countries.

Large long-haul aircraft entry, survival, and exit in China's air transport market: The Airbus 380 and Boeing 747-8I

This study explores the dynamics of entry, survival, and exit of large long-haul aircraft in China's burgeoning air transport market, focusing on the Airbus 380 and Boeing 747–8I as case studies. Utilizing rare events logistic regression and the time-dependent Cox regression model, the determinants of route entrance and survival for these aircraft from 2011 to 2021 were analyzed. The data is based on the flight plans of pertinent air routes and aircraft. Key findings include: (1) Both aircraft types favored entry into home-airfield-related, long-haul routes with a substantial existing flight volume. (2) Both aircraft exhibited prolonged survival on international long-haul routes, especially when airlines used them to bolster market share with consistent frequency. (3) Without the home-airfield advantage enjoyed by Air China, China Southern Airlines trialed the Airbus 380 on multiple occasions. Notably, if the Airbus 380 maintains operation on a route for at least 16 weeks, it demonstrates a lower likelihood of exit compared to the Boeing 747–8I.

The Likelihood of Exit for Russian Insiders: Initial Public Offerings Versus Mergers and Acquisitions

The Likelihood of Exit for Russian Insiders: Initial Public Offerings Versus Mergers and Acquisitions

Born into chaos: How founding conditions shape whether ventures survive or thrive when experiencing environmental change

AbstractResearch SummaryIntegrating research on the persistence of founding conditions and the effects of environmental change, we explore how a venture's performance outcomes following environmental change depend on the venture's environmental conditions at founding. Using a unique sample of 1,060 new ventures from a comprehensive survey of university alumni, our analysis indicates that the interaction of high environmental dynamism at founding and a functionally diverse founding team is beneficial to venture survival when environmental dynamism increases over time. However, the same founding conditions result in a decreased likelihood of positive exit when environmental dynamism decreases.Managerial SummaryThis study examines the interplay between environmental change and internal team composition, revealing how best to benefit from the potential created by environmental change. We find that (relative to functionally homogenous teams) founders that assemble more functionally diverse teams survive longer when facing increasing environmental dynamism. In contrast, a more functionally homogenous team is better able to capture opportunities when environmental dynamism decreases after founding. While predicting the course of environmental change is difficult, entrepreneurs who can synchronize their predictions of change with their decisions regarding team composition can enable better venture performance. This study also highlights the importance of developing capabilities to enable flexibility in decision‐making processes, which are often inflexible, limiting the ability to take advantage of unique opportunities provided by environmental change.

The Effect of State Minimum Wage Increases on Nonprofit Organizations

The impact of minimum wage increases on employment has been extensively examined with mixed results. We extend the literature by hypothesizing and showing a differential impact of state-level minimum wage increases on nonprofit organizations as opposed to for-profit organizations. While we find that increases in minimum wages reduce employment growth in both types of organizations, this decrease is substantially larger for nonprofit organizations. We also find that investment in automation, that is, information technology, rises in nonprofits postminimum wage increase, consistent with the substitution of capital for labor. Minimum wage increases also increase the likelihood of nonprofit exit. JEL: J38, J68, L

The long‐term impact of trade protection

AbstractA sunset review policy requires that antidumping orders be removed after 5 years unless petitioners could prove that removing protection would likely lead to the resumption of dumping. Initial sunset victories are greeted favourably by the shareholders of petitioning firms, while subsequent five‐year reviews are viewed less optimistically. Securing long‐run protection through affirmative sunset reviews appears to increase CEO compensation. Overall, we find no evidence that obtaining long‐run protection actually reduces the likelihood of exit; however, steel firms that secured trade protection for 10 years+ actually observed a higher probability of exiting, indicating that long‐run trade protection failed to save these firms. Finally, we find that more innovative firms tend to survive at a higher rate with long‐run trade protection.

Business climate and firm exit in developing countries: evidence from Nigeria

The business environment goes a long way to influence firm performance through several channels such as government policies and regulations, institutions, infrastructure, and macroeconomic variations. With developing countries known for having the most deteriorating business climate, this study set out to answer the question: "Does business climate account for firm exit in developing countries?" Using a comprehensive dataset of panel firms from the World Bank Enterprise Survey in Nigeria, the study aggregates 15 firm-level constraint variables into a composite index and estimates the likelihood of firm exit using the binary probit model. The results from the analysis infer that the unconducive state of the business climate in Nigeria significantly impedes firms’ prospects for survival. More specifically, the estimated probability of exiting the market is predicted to grow by 11% points for every additional increase in the constraint index. The recommendation follows that efforts should be geared toward improving the state of the business climate in Nigeria through carefully designed policies that can foster private sector development. Such policies should among others increase government investment in critical infrastructure, eliminate destructive tax policies, and maintain a healthy macroeconomic environment, which by implication, go a long way to improve business longevity and contributes to national development.

Among Children Placed in Kinship Care: Exit to Reunification, Adoption, or Foster Care

This study examined factors related to children’s exit from kinship care to reunification, adoption, and foster care. Data describing 498 parents of children placed in kinship care were extracted from a national survey. Results showed that the likelihood of reunification was increased with other maltreatment type, parent receipt of mental health services, number of alcoholic drinks consumed, having other health insurance, and family income; such likelihood was reduced by parent nonmedical use of medication, receipt of health-care services, and education. Number of alcoholic drinks consumed, number of IPV episodes reported, receipt of domestic-violence services, caseworker turnover, and family income increased the likelihood of exit to adoption; receipt of legal services, having other health insurance, parent of other minority race/ethnicity, and being employed diminished such likelihood. Likelihood of exit to foster care was reduced by other maltreatment, nonmedical use of medication, mental health, receipt of employment services, receipt of health-care services, having other health insurance, parent–caseworker shared race/ethnicity, Hispanic parent, other non-Black minority parent, and education. Such likelihood was increased with physical maltreatment, receipt of financial assistance, difficulty in accessing services, perceived caseworker engagement, and caseworker turnover. Implications and future research for facilitating unification, case plans, and working alliance are discussed.

The influence of onset of disease on exit from paid employment among workers in The Netherlands: A longitudinal register-based study with 9 years follow-up.

This study investigates the influence of onset of disease on exit from paid employment and whether this differs across diseases and sociodemographic groups. Register data from Statistics Netherlands on medication prescription was linked to information on employment status and demographics. Persons who were employed in 2009 and 2010 and who did not use medication for the selected disease in 2009 (N=5 889 036) were followed-up over nine years. Six diseases were identified based on medication prescription in 2010 and 2011: cardiovascular diseases, inflammatory diseases, diabetes mellitus, respiratory diseases, common mental disorders, and psychotic disorders. Four pathways out of paid employment were defined: disability benefits, unemployment, no income, and early retirement. Early exit from paid employment was defined as exiting paid employment before retirement age. Cause-specific Cox proportional hazards regression analyses were performed, with interaction terms for age, sex, and migration background. Onset of disease increased the likelihood of exit from paid employment, with the strongest associations for psychotic disorders [hazard ratio (HR) 2.88, 95% confidence interval (CI) 2.78-2.98] and common mental disorders (HR 2.00, 95% CI 1.97-2.03). Onset of disease was most strongly associated with disability benefits, followed by unemployment. The influence of common mental and psychotic disorders on disability increased until around middle-age, after which it decreased. The influence of mental health problems on exit from paid employment was stronger for persons with a non-native Dutch background and males. Onset of diseases, especially mental health disorders, is a risk for exiting paid employment before the retirement age. Effective interventions are needed to enhance an inclusive workforce and prevent involuntary loss of paid employment.

Resilient entrepreneurs? — revisiting the relationship between the Big Five and self-employment

The Big Five personality traits and their influence on entrepreneurial action have been repeatedly studied using a trait-based approach. The present paper partly deviates from this perspective by analysing the role of personality prototypes in relation to entrepreneurship. This person-centred approach suggests that combinations of Big Five traits form individual personalities. By using data from the German Socio-Economic Panel (SOEP), we show that at least three prototypes can be identified, one of which — the resilient type — can be hypothesized to significantly increase the likelihood of entrepreneurial action. Our regression results provide evidence of a positive impact of this prototype on the likelihood of and transitioning into self-employment but not the likelihood of exit. We also show that the prototyping approach explains individual self-employment decisions over and above what can already be explained by the profiling approach, another person-centred Big Five approach. The paper concludes with implications for policy and research.

Venture capital activities under uncertainty: US and UK investors behavior.

We investigate how in the context of Corporate Venture Capital (CVC), the investment decisions affect the likelihood of their subsequent exit strategies. We use OLS and probit regression as well as Weibull distribution of residual values, given its reliability and validity for studying lifetime analysis. Based on a sample of 8722 VC-backed ventures with the first investment dates between 1999 and 2018 in United States (US) and United Kingdom (UK), the results show that the presence of CVCs positively affects the funding amounts and the duration of the investment. CVC funds are more generous and more patient than Independent Venture Capital (IVC) funds regarding their investments in ventures. Moreover, the findings provide evidence that the exit strategies are directly influenced by the funding amounts and the duration of the investment which are influenced, in turn, by the fund type. Greater funding increases the likelihood of IPO exit which is reduced by longer investment duration. Our results are robust to alternative estimation methods, namely two-stage treatment-effects regressions. These results help the various stakeholders (VC funds, investors, ventures) make crucial decisions regarding investment amounts and duration, and exit.

The Effect of Dependency Burden on Household Entrepreneurial Exit Behavior: Empirical Evidence from Chinese Households

The elderly dependency ratio in China has increased from 10.7% in 2003 to 17.8% in 2019, and there may be a link between the widespread withdrawal of family entrepreneurship in society and the increased dependency burden. Based on China Family Panel Studies, we empirically examine the impact of dependency burden on household entrepreneurial exit behavior. We find that the likelihood of household exit from entrepreneurial activity increases as the population ages. Compared to active exit from entrepreneurship, dependency burden mainly induces failure exit from household entrepreneurship. In addition to reducing physical capital accumulation and labor supply, dependency burden also reduces the household workforce’s mental and physical health, leading to the entrepreneurial exit. The application of digital technology can mitigate the negative effects of dependency burden in household entrepreneurship. The mitigating effect of digital technology will be enhanced with the deepening of the application. Therefore, government and academia need to pay attention to the negative effects of dependency burden on the sustainability of household entrepreneurship.

Incumbent defense strategies and new entrants market exit: the moderating role of relational market-based assets

PurposeThe purpose of this study is to empirically investigate the impact of incumbents’ defensive strategies, specifically price-cut and capacity expansion, on new entrants’ (NEs) exit decisions and examine the moderating role of incumbents’ relational market-based assets (RMBAs).Design/methodology/approachDrawing upon real options theory, an empirical study using logistic regression is conducted on a rich, multi-market data set of NE exits between 1997 and 2019 in the U.S. airline industry.FindingsContrary to intuitive expectation, the results show that cutting prices in response to entry reduces NEs’ likelihood of market exit. However, when incumbents possess strong RMBAs, using a price cut proves to be effective in pushing NEs out of a market. Moreover, an NEs’ exit likelihood is higher when incumbents expand capacities in response to entry.Research limitations/implicationsIn this study, market exit is defined as a complete withdrawal from the market and operationalized as a binary variable. Future research could examine different degrees of downscaling by NEs while remaining in the market.Practical implicationsThis research demonstrates the opposing effects of price-cut and capacity expansion and the crucial role of RMBAs and advises managers to be cautious and consider trade-offs when implementing their defensive strategies to push NEs out of their markets.Originality/valueThis study contributes to the literature by examining the impact of incumbents’ defensive strategies, price-cut and capacity expansion, side by side and exploring the moderating role of RMBAs. Extant research has focused on antecedents of defensive strategies, whereas the consequences are the focus of this research.

Venture capital staging under economic policy uncertainty

Drawing upon a duration analysis framework, this study investigates how economic policy uncertainty (EPU) affects investment staging decisions and exit outcomes in China's venture capital (VC) market. Analyses from a sample of 61,661 venture capital investment decisions support the prediction of the real options theory that VCs delay to refinance their portfolio companies under high EPU. However, such delay effect is largely weakened in severe-VC-competition and high-technology industries, and in better economic conditions. In addition, governmental VCs with greater exposure to economic policy uncertainty are more sensitive to EPU. We further provide evidence that the investments made in times of high EPU have a lower likelihood of successful exit.

Feel dragged out: a recovery perspective in the relationship between emotional exhaustion and entrepreneurial exit

PurposeThis study investigates the relationship between emotional exhaustion and entrepreneurial exit, particularly how this relationship might be invigorated by two critical psychological factors, namely cognitive well-being (CWB) and affective well-being (AWB).Design/methodology/approachBinary logistic regression analysis was employed on a longitudinal data set of 997 self-employed individuals taken from the German Socio-Economic Panel (GSOEP) during years 2012-2013.FindingsGreater level of emotional exhaustion increases the likelihood of entrepreneurial exit. However, individuals with higher levels of affective or/and cognitive well-being are less likely to engage in the actual entrepreneurial exit behaviors.Practical implicationsEntrepreneurial exit is one of the crucial managerial decisions made by entrepreneurs. The decision to quit is not only triggered by poor firm performance but also by various psychological factors. The authors found subjective well-being as an essential mechanism promoting entrepreneurs’ overall well-being, thus recommending that entrepreneurs psychologically distance themselves from work during off times.Originality/valueFirst, the study discovered emotional exhaustion as a crucial psychological precursor of entrepreneurial exit by focusing on actual exit instances rather than intentions and strategies to exit. That contributes to understanding the psychological mechanism involved in resource gain and loss while making exit decisions. Second, affective and cognitive well-being are found to be two crucial enablers that work as a recovery process to deal with emotional exhaustion.

Throwing good money after bad: Zombie lending and the supply chain contagion of firm exit

This paper studies whether the bailout of downstream firms helps stop the supply chain propagation of business failure. By analyzing persistent zombie lending in China, we show that such a bailout policy does not work. Zombie lending to downstream firms does not reduce the exit likelihood of upstream firms. Worse, it distorts efficiency-based firm exit in upstream industries. The exit distortion effect works through the trade credit chain and is more profound in industries with stricter financial constraints and tighter supply chain connections. Our findings reveal the importance of credit allocation efficiency for the Schumpeterian process of creative destruction that is essential for economic growth.