Firm growth and failure in increasingly competitive markets: Theory and application to hospital markets

摘要: Recent models of firm failure and growth have ignored demand factors. In this paper, we generalize these theoretical analyses to include factors in explaining for heterogeneous firms local markets facing imperfect but increasing competition. The model is then applied empirically the hospital industry California over 1980s, during which time competition did intensify. We closure decision based on expectations future growth, explicitly accounting self selection simultaneity. find that both size are important determinants survival