| Summary: | Data from seven U.S. medical sector product markets established from the 1950s to the 1980s were used to study how firms in evolving industries exit a product market. Variables considered were firms' level of sales, age, and status as either a start-up business upon entering the market or a diversifying existing firm. The results demonstrate that sales and age differ systematically by type of entrant and exit. The dissolution rate was found to decline as sales increase, though the rate was not affected by age when the level of sales was controlled. On the other hand, start-up firms and diversifying entrants were more likely to sell their businesses over time, while sales levels had no effect on divestiture rate. When age, sales, and other business and corporate characteristics were controlled, little difference was found in the dissolution rate of start-ups and diversifying entrants, but diversifying entrants were more likely to sell.
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