Review of Industrial Organization 21: 283–303, 2002.
© 2002 Kluwer Academic Publishers. Printed in the Netherlands.
Exit and Survival in a Concentrating Industry: The
Case of Daily Newspapers in the Netherlands
H. L. VAN KRANENBURG
Maastricht University, Department of Management Sciences
F. C. PALM
Maastricht University, Department of Quantitative Economics
G. A. PFANN
Business Investment Research Center, Maastricht University, IZA in Bonn, and C.E.P.R.
Abstract. This paper studies the effects of aggregate, industry-, and ﬁrm-speciﬁc factors on the exit
hazard rates in the market for daily newspapers in the Netherlands from 1950 to 1996. We present a
brief overview of the exit literature. On the basis of the existing empirical evidence, we decided to
specify and estimate exponential and piecewise constant hazard rate models. We ﬁnd that exit hazard
rates of daily newspapers depend on the circulation size, ownership, and number of incumbents.
Moreover, the effects are time-dependent. We do not ﬁnd any signiﬁcant effect of macroeconomic
Key words: Concentrating industry, daily newspapers, scale economies, survival chances.
JEL Classiﬁcations: C41, D21, L13, L16, L82.
The dynamics of exit patterns in industry and services are complex and still poorly
understood. In recent years, it has been recognized that ﬁrm- and industry-speciﬁc
characteristics, such as ﬁrm size and volatility in market shares, are crucially
important features of an ongoing concentration process (see, e.g., Klepper and
Grady, 1990; Agarwal and Gort, 1996). To date, empirical analyses have had lim-
ited success in testing hypotheses on ﬁrm- and industry-speciﬁc determinants of
survival chances of ﬁrms. The primary reason has been the limited availability of
ﬁrm-speciﬁc industry life cycle data. As a result, the issue of explaining industry
Corresponding address: Maastricht University, FDEWB-MW / Strategy, P.O. Box 616, 6200
MD Maastricht, The Netherlands, E-mail: H.vankranenburg@MW.Unimaas.NL
We thank Martin Carree, Glenn Carroll, Joan Hemels, Alfred Kleinknecht, Marc van Wegberg and the
referees for useful comments. The ﬁrst author is grateful to the Maastricht University Fund SWOL
for ﬁnancial support through a grant.