Blanchard, Pierre; Huiban, Jean-Pierre; Mathieu, Claude - In: Applied Economics 46 (2014) 16, pp. 1883-1893
This article provides an empirical model of the shadow of death in which the exit probability of a firm depends on the firm's productive performance and the firm's level of sunk costs, which are viewed as barriers to exit. The shadow of death effect is treated by assuming a relationship between...