Understanding firm exit: a systematic literature review

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.

The Long-Run Equilibrium of Industry Population and Bottom Lines: Analysing the Near-Perfect Restaurant Industry

“…A rich body of literature investigating the reasons for firms' exits is available (Cefis et al, 2021). Wennberg et al (2010) suggest three are three types of firms exit from the market: mergers and acquisitions (M&A), voluntary liquidation, and bankruptcy.…”

Employee Welfare, Social Capital, and IPO Firm Survival

“…In a similar vein in relation to socioeconomic environmental conditions, Camacho and Rodriguez (2013) study the manufacturing firms in Columbia and find that higher rates of business exits were in the municipalities experiencing higher rates of armed conflict. This indicates that social and economic unrest discourages firms from staying in the market (Cefis et al, 2021).…”

More Prosocial, More Ephemeral? The Role of Work-Related Wellbeing and Gender in Incubating Social Entrepreneurs’ Exit Intention

“…While most entrepreneurial studies focus on successful entrepreneurs, quite a few shed light on unsuccessful ones who quit their businesses [ 1 , 2 ], especially social entrepreneurs who endure more difficulties in sustaining their businesses [ 3 , 4 ]. Despite the fact that anyone who starts a business will, in the course of time, exit his or her firm [ 1 , 5 , 6 ], little is known about the psychological antecedents of such a personal decision of exit [ 1 , 7 , 8 , 9 ] and, more importantly, the emotional processes that might be undermining the business operation, eventually leading to the exit decision [ 8 , 10 ].…”