Industrial Survival Theory. An Analytical Framework for Explaining the Continuity of Industrial Firms and Their Market Exit Dynamics

Abstract

This study aims to develop an integrated theoretical framework for explaining industrial survival and firm exit. While industrial economics has traditionally focused on market structure, competition, monopoly, pricing, and productivity, the issue of industrial survival has received relatively limited attention as an independent analytical phenomenon.

Industrial survival is defined as the ability of industrial firms to maintain economic activity over the long run while preserving competitiveness and adapting to economic and institutional changes. The study examines both internal determinants—such as managerial efficiency, firm size, production capacity, cost management, and quality—and external determinants, including market competition, government policies, access to finance, macroeconomic stability, and institutional arrangements.

Using a descriptive-analytical approach, the study integrates major industrial economics theories, including the Structure-Conduct-Performance paradigm, Transaction Cost Economics, the Resource-Based View, and Competitive Advantage Theory. Based on this integration, the paper proposes a new conceptual model entitled the Industrial Survival Framework (ISF), which consists of four dimensions: operational efficiency, competitive capability, market flexibility, and institutional environment.

The study contributes to the literature by introducing a new analytical concept of industrial survival and providing a theoretical foundation for future empirical research in industrial economics.