Modes Of Exit Research Articles

Landmarks as lighthouses: firms' innovation and modes of exit during the business cycle

We revisit the relationship between innovation and survival, tracking how innovation types (product, process, organizational, and marketing innovation) relate to exit routes (closure, failure, M&A) during different phases of the business cycle (i.e. normal times, the 2007–08 financial crisis and subsequent recovery). In particular, we implemented a new (to the economic field) econometric approach, landmark analysis, to include time-varying covariates in survival models with competing exit routes on our representative sample of Dutch firms (obtained merging monthly register data with biennial innovation surveys, for 2006–2015). Our most straightforward result is that each type of innovation, across the different phases of the business cycle, affects, in a substantially different way, the likelihood to exit the market through different modes of exit. Innovations seems to grant some innovation premium, but no common pattern appears between the evolution of the relationships between different types of innovation and exit routes across the business cycle.

Development of multimode gas-fired combined-cycle chemical-looping combustion-based power plant layouts.

Operation of power plants with carbon dioxide capture and sequestration (CCS) and without carbon dioxide capture and storage modes and energy penalty or energy utilization in such operations is of great significance. This work reports on two gas-fired pressurized chemical-looping combustion (CLC) power plant layouts with two inbuilt modes of flue gas exit, namely, one with carbon dioxide capture mode and the second mode is letting flue gas (consists of carbon dioxide and water) without capturing carbon dioxide. Without CCS mode, the higher thermal efficiencies of 54.06 and 52.63% are obtained for natural gas and syngas, respectively. In carbon capture mode, a net thermal efficiency of 52.13% is obtained with natural gas and 48.78% with syngas. The operating pressure of the air reactor is taken to be 13bar for realistic operational considerations, and that of the fuel reactor is 11.5bar. Two power plant layouts were developed based on combined-cycle chemical-looping combustion (CC CLC) for natural gas and syngas fuels. A single layout is developed for two fuels with a possible retrofit for dual fuel operation. The CLC power plants can be operated with two modes of flue gas exit options, and these operational options make them higher thermal efficient power plants.

Public cash and modes of firm exit

Public cash and modes of firm exit

Classification of ablation mode during impact of hot liquid jet on a solid

The ablation consecutive to hot jet impingement is a safety issue for future Sodium Fast Reactors (SFR) core-catcher that can occur during relocation of molten fuel (corium) under severe nuclear accident situation. Much is still unknown on the ablation phenomenon especially explanations on cavity shape are lacking. However, these data are required to specify the core-catchers which will be used in future nuclear reactors’ vessel to prevent the corium from drilling through the confinement vessel during severe accident. To tackle this subject, data from experiments are obtained and analyzed to identify first order physical mechanisms at stake, and their links to geometry of the cavity. Two ablation mechanisms are noticed, the film ablation regime, for which liquid exits the cavity as a liquid film followed by the pool effect for which the cavity is filled with liquid. The analysis of results shows that the cavity shape is fixed during the film ablation regime and translates as ablation proceeds. Modes of liquid exit from the cavity are analyzed as well as the shapes the cavity assumes. Liquid/air interface temperature is also determined, in the film ablation regime. An explanation of cavity shape is presented. Conditions based on dimensionless numbers are put forward to differentiate between different cavity shapes and liquid exit modes. A first model for transition between film and pool effect ablation regimes is presented. It is the first time to the best of our knowledge that such analyses are undertaken. These give new tools for ablation risk assessment.

A random effects multinomial logit model for the determinants of exit modes

PurposeThe purpose of this paper is to examine the factors associated with three modes of firms’ exit (voluntary liquidation, involuntary liquidation and acquisition) in a mutually exclusive environment. In particular, three modes of exit are treated as independent events given that different causes and consequences exist for each exit mode. The data set is a panel of 4,408 US manufacturing firms spanning over the period 1976–1995.Design/methodology/approachThe discrete choice model is used to establish a relationship between modes of exit and a set of explanatory variables, which are specific to the firm, industry and macroeconomic conditions. Use of panel data encourages us to estimate a random effects multinomial logistic regression model, which allows exit modes as mutually exclusive events and at the same time controls the firm-specific unobserved heterogeneity in the sample.FindingsThe analysis suggests that the determinants of voluntary liquidation are age, size, profitability, technology intensity and inflation level. The determinants of involuntary liquidation are size, leverage, profitability and inflation level. For acquisition, determinants are age, size, advertising intensity, Tobin’s q, GDP growth, inflation level and interest rate. The findings suggest that exit modes have a different set of determinants and the scale of effects of some common determinants such as age, size and profitability differs between exit modes.Research limitations/implicationsThe analysis presented in this study relies on data from US manufacturing firms only. Thus, there is a need to explore the determinants of exit modes in other countries as well using the proposed econometric model.Practical implicationsThe findings presented in this paper are useful for managers and policymakers to design strategies/actions for avoiding particular mode of exit.Originality/valueThis study provides empirical evidence on the differences in factors associated with exit modes and confirms the existence of mutually exclusive nature of exit modes. Findings suggest that for future empirical studies on firm exit, the exit modes must be treated as a heterogeneous event.

Modes of Business Entry and Exit in Family Firms: The Role of Resource Intangibility

Are family firms’ business entry (internal development versus acquisition) and exit (dissolution versus sale) mode choices distinct from those of non-family firms, and what is the role played by intangible resources? Building on a comprehensive sample of privately-held Swedish firms, we find that family firms are more likely than non-family firms to enter a new business via internal development than acquisition, and more likely to exit from an existing business via dissolution than sale. Additionally, resource intangibility at the organizational level strengthens the differences in exit and entry modes between family and non-family firms such that compared to non-family firms, family firms are increasingly more likely to rely on the internal development and dissolution of business units as the availability of intangible resources increase. Contributions to existing literature on entry and exit modes and on family business’ strategic choices are shared in the concluding section.

Some Reflections on Private Equity: Trends, Valuation, and Challenges

Private Equity or PE has been hailed as one of the most significant sources of capital for enterprises (private in particular) in order to expand business activities both in terms of scale of operations and scope of activities. Unlike Venture Capital (VC) funds, PE funds focus more predominantly on middle-sized businesses that demonstrate enormous potential for growth and expansion. As the major shareholders of PE funds seek to earn attractive rates of return on their investment, it becomes imperative for these funds to be very selective in picking most suitable candidates for investment. The business model of a typical PE fund revolves around taking a strategic stake in the target firm, which is complemented with a representation in the board in the form of a directorial position. PE funds envisage bringing about operational and structural changes in the target firm with an ultimate eye on enhancing the value of the firm. Typical investment horizons for PE funds vary between 5 to 10 years with popular modes of exit being: Public floatation of stock (as in IPOs), Management buyouts, and

A Semi-Markov Multiple State Model for Reverse Mortgage Terminations

AbstractReverse mortgages provide a mechanism for seniors to release the equity that has been built up in their home. At termination, the mortgagors are usually guaranteed to owe no more than the value of their property. The value of the reverse mortgage guarantee is heavily dependent on the maturity or termination date, which is uncertain. In this paper, we model reverse mortgage terminations using a semi-Markov multiple state model which incorporates three different modes of exit: death, entrance into a long-term care facility, and voluntary prepayment. We apply the proposed model specifically to develop the valuation formulas for roll-up mortgages in the UK and Home Equity Conversion Mortgages (HECMs) in the USA. We examine the significance of each mode of termination by valuing the contracts allowing progressively for each mode. On the basis of our model and assumptions, we find that both health related terminations and voluntary (non-health related) terminations significantly impact the contract value. In addition we analyze the premium structure for US reverse mortgage insurance, and demonstrate that premiums appear to be too high for some borrowers, and substantial cross-subsidies may result.

Determinants of Firms’ Liquidation and Acquisition in the Indian Electronics Industry

This study examines the determinants of firms’ liquidation and acquisition in the Indian electronics industry during the period 1990–2006. It is argued that liquidation and acquisition are alternative modes of exit. Therefore, these modes of exit might have different determinants. To explore this possibility, a multinomial logistic (MNL) regression model is estimated using cross-sectional data of 540 firms. We find that the effects of age, size, leverage, innovative competence and profitability are significant for the likelihood of liquidation. In contrast, the effect of profitability was found insignificant for the likelihood of acquisition. Moreover, the effects of size and leverage are dissimilar across the exit modes, that is, large firms are more likely to be liquidated but less likely to be acquired, and high leverage firms are more likely to be liquidated but less likely to be acquired. The findings of this study show that the determinants of liquidation and acquisition modes of exit are different in the Indian electronics industry. JEL Classification: C25, G33, G34, L63

Study of Modes of Exit of Life – Insurance Policy Holders in Nigeria: Trends and Patterns

Life Insurance contract is that under which one party pays a certain sum of money referred to as premium to another party in return on the happening of specified contingency (ices). These contingencies include: deaths, maturity, surrender lapsed and paid-up. These however, operate simultaneously as mutually exclusive events that impinge negatively on the life assurance portfolio.Most life assurance policyholders complain of the adverse effect of inflation on the policy values at the time of payment on the happening of the contingencies. This has resulted in a high rate of lapse, surrender and conversion to paid-up status. This study therefore, investigates the effects of these multiple decrements on life assurance portfolios, which resulted in the hypothesis propounded and tested in this research. Based on the findings, the study recommends that life insurance companies should enlighten the public more on the benefits of life assurance and evolve some incentives so as to avoid the negative impact of these modes of decrement on life assurance portfolios.

Group strength, accountability and growth under dictatorship

This article tests the hypothesis that group power affects development policy by holding dictators accountable through different mechanisms. New data on dictators’ modes of exit for the period 1946—2000 allow us to estimate the predicted likelihood that a given authoritarian head of government will be toppled by the elite, the military or the citizenry. When the predicted odds are used as a measure of group strength, the results of simple growth regressions reveal that a stronger citizen opposition or a greater military threat compels the ruler to improve economic growth rates. In contrast, elite power is negative for growth, although it turns positive when a country reaches a certain level of industrialized development.

ENTREPRENEURIAL EXIT AND REENTRY: AN EXPLORATORY STUDY OF TURKISH ENTREPRENEURS

This study attempts to develop a better understanding in an emerging economy of the exit and reentry processes of entrepreneurs. Twelve case studies were conducted in Turkey with entrepreneurs who, following entrepreneurial exit, re-entered with new ventures. Human and social capital perspectives are used to gain insights into the reentry process. The study indicates that reasons for and modes of exit influence the entrepreneur's decisions surrounding reentry. Results further reveal that experiential and educational dimensions of human capital are instrumental in the reentry process. The study finds that structural and relational dimensions of social capital are cardinal factors that influence the reentry process.

Repression, Political Threats, and Survival Under Autocracy

Dictatorships are generally characterized by their use of repression, which is higher than that of democratic systems. Repression is, jointly with the mobilizing of some political support, one of the two basic instruments dictators use in order to stay in power. There is broad empirical evidence proving that loyalty and cooptation help dictators survive in office. Yet, there is not systematic investigation analyzing the role of repression. Does repression help dictators retain power? This paper is aimed at filling this important gap. In particular, I address the simultaneous relationship existing between survival and repression by implementing a two-stage estimation method. I use data on authoritarian rulers’ survival and modes of exit. Data on repression are from the Political Terror Scale, the Cingranelli and Richards’ Physical Integrity Rights Index, and Freedom House’s civil liberties score. The results show that an increased probability of exit causes important and significant increases in repression levels; and that repression helps increasing the likelihood of dictators’ survival. Further, I also analyze if repression affect differently survival once the modes in which rulers’ can be replaced are disaggregated, and vice versa. Curiously, political terror is found to be only significantly helpful in preventing non-violent and regular exits, but not violent or irregular ones. Instead, restrictions on civil liberties are effective in deterring both types of threats. Similarly, it is only non-violent threats which trigger significant increases in political terror, while the risk of a violent or irregular exit leads the regime to increase restrictions on civil liberties.

Autocrats' modes of exit, rents, and crisis in Africa

Studies analyzing dictators’ duration in power do not generally distinguish the way through which rulers are booted out. In consequence, a destabilizing effect is attributed to some variables without specifying and testing the mechanisms through which this effect may operate. In this paper, we argue that ‘regular’ leadership changes stem from the incumbent’s incapacity to thwart elite defection and opposition groups coordination through the use of patronage, whereas, ‘irregular’ changes are mainly brought about by economic collapse and the widespread of poverty. We also analyze the patterns behind the steady institutionalization of African politics. Data from all African countries between 1946 (or the year of independence) and 2000 permit us to put such general hypotheses under scrutiny and confirm them using multinomial logistic duration regressions. It is also shown that foreign pressure, aid conditionality and domestic opposition have been the major determinants of institutionalization of African dictatorships, making, thus, possible the decrease in the number of irregular ousters. Key words: Regular leadership changes, irregular changes, Africa, institutionalization.

Ionic dysregulations typical of ischemia provoke release of glycine and GABA by multiple mechanisms

Energy deprivation during ischemia causes dysregulations of ions, particularly sodium, potassium and calcium. Under these conditions, release of neurotransmitters is often enhanced and can occur by multiple mechanisms. The aim of this work was to characterize the modes of exit of glycine and GABA from nerve endings exposed to stimuli known to reproduce some of the ionic changes typical of ischemic conditions. Their approach was chosen instead of application of ischemic conditions because the release evoked during ischemia is mechanistically too heterogeneous. Mouse hippocampus and spinal cord synaptosomes, pre-labeled with [(3)H]glycine or [(3)H]GABA, were exposed in superfusion to 50 mM KCl or to 10 microM veratridine. The evoked overflows differed greatly between the two transmitters and between the two regions examined. Significant portions of the K(+)- and the veratridine-evoked overflows occurred by classical exocytosis. Carrier-mediated release of GABA, but not of glycine, was evoked by high K(+); GABA and, less so, glycine were released through transporter reversal by veratridine. External calcium-dependent overflows were only in part sensitive to omega-conotoxins; significant portions occurred following reversal of the plasmalemmal Na(+)/Ca(2+) exchanger. Finally, a relevant contribution to the overall transmitter overflows came from cytosolic calcium originating through the mitochondrial Na(+)/Ca(2+) exchanger. To conclude, ionic dysregulations typical of ischemia cause neurotransmitter release by heterogeneous mechanisms that differ depending on the transmitters and the CNS regions examined.

Dealing with Tyranny: International Sanctions and the Survival of Authoritarian Rulers1

This paper examines whether economic sanctions destabilize authoritarian rulers. We argue that the effect of sanctions is mediated by the type of authoritarian regime against which sanctions are imposed. Because personalist regimes and monarchies are more sensitive to the loss of external sources of revenue (such as foreign aid and taxes on trade) to fund patronage, rulers in these regimes are more likely to be destabilized by sanctions than leaders in other types of regimes. In contrast, when dominant single-party and military regimes are subject to sanctions, they increase their tax revenues and reallocate their expenditures to increase their levels of cooptation and repression. Using data on sanction episodes and authoritarian regimes from 1960 to 1997 and selection-corrected survival models, we test whether sanctions destabilize authoritarian rulers in different types of regimes. We find that personalist dictators are more vulnerable to foreign pressure than other types of dictators. We also analyze the modes of authoritarian leader exit and find that sanctions increase the likelihood of a regular and an irregular change of ruler, such as a coup, in personalist regimes. In single-party and military regimes, however, sanctions have little effect on leadership stability.

Preserving Employee Dignity During the Termination Interview: An Empirical Examination

Despite the ongoing need for managers to fire employees and the wide prevalence of downsizing and layoffs, little research has examined how the conduct of termination interviews affects employee reactions. The current research was designed to explore reactions to several commonly used termination interview practices. Two scenario-based experiments examined the effectiveness of having a third party (an HR manager or a security guard) present, mentioning the employee’s positive characteristics and contributions, and using alone, discrete escort, or public escort modes of exit from the interview. Perceptions of being treated with respect and empathy, levels of anger, and the likelihood of complaining to others and taking legal action were assessed. Support for the effectiveness of specific termination interview practices was mixed. Specifically, in Experiment 1, third party presence was viewed as demonstrating a lack of respect, whereas mentioning positive characteristics was generally viewed favorably. Experiment 2 showed the favorable effects of mentioning positive characteristics were eroded by a security guard escort from the interview, and actually reversed and became negative when that escort was public in nature. A public escort also produced the highest levels of anger. These results suggest that multiple aspects of the termination interview process should be considered carefully when developing managerial policies.

Dealing with Tyranny: International Sanctions and Autocrats' Duration

This paper enquires into whether economic sanctions are effective in destabilizing authoritarian rulers. We argue that this effect is mediated by the type of authoritarian regime against which sanctions are imposed. Thus, personalist regimes and monarchies, which are more dependent on aid and resource rents to maintain their patronage networks, are more likely to be affected by sanctions. In contrast, single-party and military regimes are able to maintain (and even increase) their tax revenues and to reallocate their expenditures and so increase their levels of cooptation. Data on sanction episodes, authoritarian rulers and regimes covering the period 1946-2000 have allowed us to test our hypotheses. To do so, duration models have been run, and the results confirm that personalist autocrats are more vulnerable to foreign pressure. Concretely, the analysis of the modes of exit reveals that sanctions increase the likelihood of an irregular change of ruler, such as a coup. Sanctions are basically ineffective when targeting single-party or military regimes.

Closure and divestiture by foreign entrants: the impact of entry and post-entry strategies

We analyze the longevity of foreign entrants explicitly considering two possible ways of exit: firm closure and capital divestiture. We find that entry and post-entry strategies affect the longevity of firms and of foreign equity holdings, but in different manners. While the ownership arrangements and organizational structure affect the likelihood of divestment, they exert no significant effect upon closure. The entry mode exerts opposite effects on the two modes of exit, greenfield entrants being more likely to shutdown, but less likely to be divested. Only human capital affects closure and divestment in the same manner. Firms with large endowments of human capital are less likely to exit, irrespective of the exit mode considered. Copyright © 2000 John Wiley & Sons, Ltd.

The impact of modes of entry and resource fit on modes of exit by multibusiness firms

This study examines the choices of modes of entry and exit in the process of new business exploration. We find that exit mode choices are determined by a different set of factors from those that are important for the entry mode decision and the exit decision per se. Our study indicates that when the resource profiles of a parent firm and the business unit are more dissimilar, and there has been less development of firm-specific idiosyncratic assets, firms are more likely to sell businesses than dissolve them. Further, the study reports a strong relationship between the mode of exit from a line of business (sell-off vs. dissolution) and the original mode of entry (acquisition versus internal development). Copyright © 1999 John Wiley & Sons, Ltd.