Geographical patterns of firm exit in emerging economies: evidence from Türkiye

Purpose This paper investigates the regional determinants of firm exit in an emerging economy, using Türkiye as an informative case. It examines whether firm exit exhibits spatial dependence and which regional characteristics are associated with variation in exit rates across provinces. Design/methodology/approach Using province-level panel data for 2013–2024, the study applies spatial panel models — SAR, SEM and SARAR — to examine how regional characteristics relate to firm exit rates. The analysis accounts for spatial dependence and controls for economic and infrastructural variation. The sample period covers economic expansion, financial tightening and the COVID-19 shock. Findings We find significant spatial dependence, indicating that exit dynamics propagate across provincial boundaries through competitive spillovers and spatially correlated unobservables. Urbanization is positively associated with exit, consistent with stronger competitive selection in denser economies. Digital infrastructure is consistently associated with lower exit rates. Financial development reduces exit in baseline specifications but shows sensitivity to proxy choice. Findings are robust to alternative spatial weight matrices and dependent variable definitions. Practical implications Regional structural and infrastructural conditions are systematically related to firm exit outcomes. Policies strengthening digital connectivity may support regional adjustment capacity, while spatial dependence of exit underscores the need for regionally coordinated strategies that account for interregional competitive spillovers. Originality/value The study shows that exit processes are spatially interdependent and conditioned by regional structural and infrastructural characteristics. By explicitly modeling spatial dependence, the paper extends firm-level selection models to the regional level and broadens the firm exit literature beyond advanced Western European economies.