Tangible and intangible sunk costs and the entry and exit of firms in a small open economy: the case of Austria
The paper provides evidence on the role of sunk costs as mobility barriers. An empirical study of the Austrian manufacturing industry explicitly considers sunk costs related to investment in dedicated intangible assets. The results confirm the relevance of sunk costs as mobility barriers, their symmetry with respect to entry and exit, and show that the influence of sunk costs is robust to aggregation.
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Document Type: Research Article
Affiliations: Austrian Institute of Economic Research (WIFO), PO Box 91, A-1103 Vienna, Austria
Publication date: 2005-12-10