Spatially correlated exit strategies in the baking industry

Author: Sarmiento Camilo   Wilson William W.  

Publisher: Routledge Ltd

ISSN: 1466-4283

Source: Applied Economics, Vol.39, Iss.4, 2007-03, pp. : 441-448

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Abstract

This article uses a unique data set to analyse economic factors that explain firm exit and the interrelation across firms in space when exiting. Results show the effectiveness of modelling spatial correlation in a logit exit model. Indeed, in our application, reliable statistical results could only be drawn from our data when including spatial correlation in the model.