the shadow of death analysing the pre exit productivity of portuguese manufacturing firms the pre exiting productivity profile of mature firms relative to survivors is examined along with an evaluation of how productivity affects the probability of exit along various dimensions an empirical approach based on an unbalanced panel of portuguese manufacturing firms covering a 10 year period is used the findings confirm that market selection forces low productivity firms to exit but there is also evidence that a sizeable portion of low productivity firms do not shut down conversely there is a non negligible fraction of high productivity firms that do actually close consistent with some key theoretical predictions our analysis reveals that exiting firms have a falling productivity level over a number of years prior to exit finally the results from the survival model show that both small firms and ones with low productivity are relatively much more likely to exit the market industry and macro environment are also found to have a non negligible role on the exit of mature firms

growth of firms in developing countries evidence from cote d ivoire the paper presents evidence in support of a particular growth process of firms that is consistent with a missing middle in the size distribution of manufacturing firms in african countries firm growth is explained by size and age effects as a result of efficiency exploiting through scale enlargements and learning but is strongly moderated by reputation effects and formal legitimation which facilitate access to output markets and resources complementing the model with data on growth obstacles as perceived by the owners of firms medium sized firms are found to be strongly hurt by insufficient access to infrastructure and financial services

market dynamics in the netherlands competition policy and the role of small firms a recent literature analyzing the dynamics of firms and industries suggests that the contribution of new and small firms to the dynamics of competition is significantly greater than found in a static analysis policy makers have responded by implementing a wide range of programs to reduce barriers to new firm startup at the same time a number of european countries have maintained systems of collective agreements imposing industry wide standards on the deployment and remuneration of inputs particularly labor the purpose of this paper is to examine whether the ability to deviate from the industry standards practiced by the incumbent firms promotes the viability of small and new firms we examine this using a longitudinal data base from the netherlands where a system of rigid industry wide collective agreements was abandoned in favor of greater flexibility whether or not the ability of small firms to deviate from the standards and practices of the incumbent firms in the industry promotes their viability in the dutch context is instructive to other european countries such as germany and france the latter countries have identified the startup of new firms as a central policy goal but have maintained systems of industry wide collective agreements the important finding emerging from this paper is that wage flexibility promotes the viability of small firms and thus can be considered to be an instrument of competition policy in a dynamic context

does entry size matter the impact of the life cycle and technology on firm survival a wave of empirical studies has recently emerged showing that smaller scale entry is confronted with a lower likelihood of survival than their larger counterparts the purpose of this paper is to examine whether the relationship between size of a firm when entering an industry and the likelihood of survival holds under different technological conditions and across the different stages of the industry life cycle the empirical evidence suggests that the relationship between firm size and the likelihood of survival is shaped by technology and the stage of the industry life cycle while the likelihood of survival confronting small entrants is generally less than that confronting their larger counterparts the relationship does not hold for mature stages of the product life cycle or in technologically intensive products in mature industries that are still technologically intensive entry may be less about radical innovation and possibly more about filling strategic niches thus negating the impact of entry size on the likelihood of survival

size age and activity sector on the growth of the small and medium firm size although corporate growth is one of the most researched subjects in different areas of economic science it is not currently based on a general theory or generally accepted conceptual definition in spite of this growth has usually been considered an essential objective for a firm contributing to its survival and competitiveness this work aims to provide a more in depth study of the factors that condition the growth of small and medium sized firms by offering some empirical evidence that will contribute to its modelling especially in relation to the influence of size age and activity sector in this context we shall attempt to contrast the validity of gibrat s approach and the learning theory

plant closings and exit behaviour in declining industries the plant closing and exit strategies of firms operating in a declining industry are examined a dynamic game theoretic model is utilized the perfectness criterion is used to restrict the set of nash equilibria there are two key equilibrium results first when firms have the same number of plants high cost plants close before lower cost plants second a larger firm i e a firm operating more plants begins closing plants before a smaller firm as long as cost differences are not large copyright 1988 by the london school of economics and political science

an explanation of the life span of new french firms in contrast to previous studies on firm survival which tend to focus on features related to the structure of the firms and their area of activity our aim here is to widen the perspective usually adopted in the field taking into account a larger and more qualitative set of variables among these variables features related to the individual characteristics of the entrepreneur to the context of entrepreneurship and to the insertion in entrepreneurial networks are significant to explain the life span of new firms the empirical material is drawn from two surveys which provide detailed data about a group of new firms created in france in 1994 and closed down before 1997 or still running in 1997 our empirical approach on qualitative data is based on data analysis methods linear discriminant analysis barycentric discriminant analysis analysis of variance according to the characteristics of the entrepreneur the main explanatory factors for the survival of new firms are the fact that they are entrepreneurs who have taken over firms that they have acquired during their previous occupational activity an experience in the same branch of activity and that they experience a successful integration into the entrepreneurial networks these three factors show that the survival of young firms is indirectly conditioned by the existence of an initial custom by the mastery of a job and by the know how in the entrepreneurial function

user industry spinouts downstream industry knowledge as a source of new firm entry and survival recent scholarship on entrepreneurship suggests that the pre entry know how of start ups embodied in their founders affects not only entry but also performance although prior work focuses on new entrants from the focal industry i e employee spinouts and academic organizations i e university spinoffs this study identifies and examines a hybrid category of start ups from downstream user industries which we call user industry spinouts we draw from the literature on evolutionary theory user innovation and industrial dynamics to propose that given the unique combination of knowledge inherited by these entrants their choices at entry and their ability to survive in the focal industry will differ with respect to other start ups we do this by extending existing work on new firm creation to investigate entry and performance in different product markets our findings based on a dataset of start ups in the semiconductor industry over a 10 year period 1997 2007 show that user industry spinou

financial constraints and firm post entry performance abstract firms finance production by internally generated funds and external loans the benefits of leverage however come with a cost this cost is related to the uncertainty banks face about the firm s quality and output price as time evolves banks learn about the firm and adjust the terms of the loan contract because of this firms do not have equal access to credit small young firms face greater binding debt constraints than more mature firms with well known prospects the firm survival rate as well as the firm rate of growth are therefore important issues in analyzing firm post entry performance

effect of credit guarantee policy on survival and performance of smes in republic of korea this study evaluates the effect of credit guarantee on smes at the firm level to estimate the effect of credit guarantee we analyze relations between credit guarantee the survival of guaranteed firms and their productive performance the result indicates that credit guarantee frequency enabled guaranteed firms to achieve good performances in general on the contrary the effect of guarantee amounts is ambiguous in that there is difference between the contemporary effect and the lagged effect therefore we conclude that credit guarantee satisfied partially its goal to alleviate smes difficulty in acquiring finance and to stabilize employment

economic failure and the role of plant age and size this paper introduces a large scale administrative panel data set on corporate bankruptcy in germany that allows for an econometric analysis of involuntary exits where previous studies mixed voluntary and involuntary exits approximately 83 of all bankruptcies occur in plants with not more than 10 employees and 61 of all bankrupt plants are not older than 5 years the descriptive statistics and regression analysis indicate substantial negative age dependence with respect to bankruptcy risk but confirm negative size dependence for mature plants only our results corroborate hypotheses stressing increasing capabilities and positional advantage both predicting negative age dependence with respect to bankruptcy risk due to productivity improvements the results are not consistent with the theories explaining age dependence via imprinting or structural inertia

survival of newly founded businesses a log logistic model approach based on a longitudinal database we test the liability of adolescence hypothesis which states that new firm hazard rates follow an inverted u shaped pattern that is the hazard rate is low for the initial period the end of adolescence is marked by a hazard maximum from which the rate declines monotonically we use a log logistic model which shows that the liability of adolescence argument describes the hazard rates of new establishments for all two and three digit industries fairly well further the rate shows that the desegregation of industries matters and considerable differences are found within and across two and three digit low moderate and high tech industries in assessing the effect of market environment conditions on risk we find that risk to be elevated in a relatively large number of two digit low and high tech industries in the presence of scale economies but it is substantially reduced in moderate tech industries by contrast the hazard rate tends to be reduced for quite a large number of three digit low moderate and high tech industries in comparison with the two digit industries indicating a longer adolescence the influence of start up size in reducing the hazard rate is apparently similar between two and three digit low moderate and high tech industries the impact of market growth on the risk of failure is not much different for both two and three digit low moderate and high tech industries

survival analysis of the spanish hotel industry abstract the main objective of this study is an analysis of survival in the spanish hotel industry we used a sample of 1033 hotels opened from 1997 to 2009 examining financial and non financial variables including size location type of hotel management economic and financial structure and the year they opened whether during an expansion or crisis period the methodology included an econometric analysis of survival using the non parametric kaplan meier estimator of constructed variables in order to detect the particular influence of each variable semi parametric regression was done with the cox proportional hazards model confirming which variables clearly influenced the survival of hotels and which signs existed for each analysed variables influence the survival of hotels depends on their size location management and launch in a time of prosperity however survival rates were not significantly tied to particular types of hotels or configurations of their economic and financial structures

a note on the relation between size ownership status and plant s closure sunk costs vs strategic size liability abstract in this paper we test both sunk cost and strategic size liability predictions by looking at the exit behavior of a sample of italian manufacturing plants for this purpose we focus on plants size and ownership status in particular we distinguish independent plants from plants that belong to multi unit organizations as to these latter we further distinguish state owned from privately owned plants we also consider the impact upon the likelihood of closure of the size and nationality of the parent firm in addition and contrary to previous empirical work data allow us to control for differences in the cost structure of plants namely we use technology adoption dummies to take into account plants technological heterogeneity

trends in agricultural price and trade policy instruments since 1990 in central european countries a survey of agricultural price and trade policy instruments of central european countries since the beginning of economic transition indicates several similar patterns of instrument choice among the transition economies we find that the common pattern of agricultural policy choices in central european countries mirrors many important features of the western european experience in addition we also find that free trade associations and international agreements have and will increasingly limit the set of agricultural price and trade policy instruments available to governments

business failure of new firms an empirical analysis using a multiplicative hazards model abstract this paper investigates business failure of new firms using a multiplicative hazards model we estimate the determinants of business failure among new manufacturing firms in tokyo during the period 1986 to 1994 it is found that a new firm without sufficient capital or a sufficient size has a higher risk of business failure it is also found that the new firm tends to have more difficulty surviving in an industry characterized by a high entry rate with respect to the timing of entry the new firm that entered just before or after the collapse of the so called bubble economy has been more likely to fail furthermore we estimate a regression model based not only on age but also on calendar time by using a regression model based on calendar time it is found that the firm s age has been related to business failure

on industry life cycles delay entry and shakeout in beer brewing abstract this paper proposes a new explanation for industry shakeout an event evident in the life cycle of many industries in which the number of firms drops significantly in a short interval of time based on an in depth analysis of the shakeout in the united states beer brewing industry between 1880 and 1890 we propose that industry shakeouts naturally follow periods of mass entry by firms similar patterns are evident in two other industries we briefly examine the us automobile and tire industries while entry rates fluctuate broadly in all these industries we find that the timing of exit for a given cohort of entrants is remarkably similar over time the exit hazard rate is peaked in the first two years of every cohort s life and drops dramatically to low and stable levels for subsequent ages in this sense mass exit follows mass entry and does not require a deep explanation it is the mass entry evident in the data for these industries that requires an explanation we propose a theoretical model of information accumulation to explain entry into an industry entrepreneurs are uncertain about the profitability of the industry and this uncertainty is resolved through sufficient accumulation of information regarding the fortunes of incumbent firms delay in entry occurs solely due to the fact that it takes time to accumulate sufficient information to support more entry the resulting entry pattern from simulations of the model looks much like that observed in the industries we study

survival duration of plants evidence from the us petroleum refining industry abstract this paper presents a duration analysis on the survival of us petroleum refining plants for the 1981 1986 period when the industry as a whole declines in response to the decontrol of crude oil markets the purpose is to examine the duration dependence and determinants of post deregulation plant lifetimes the weibull model with the correction for unobserved individual heterogeneity provides a better fit to the data empirical results show that plant size age regulatory subsidies technology use and multiplant coordination are key determinants of refinery life duration after deregulation in addition major integrated oil companies tend to make timely restructuring via refinery closures and sales the interactive effects of size and technology use and of multiplant coordination and integrated organization are also important to the refinery survival

the role of linkages in firm performance evidence from southern italy abstract this paper estimates the probability of success of post entry performance of new firms using survey data from a group of southern italian small firms several factors involving inter firm linkages contribute to success especially production for order and subcontracting the empirical investigation supports hirschman s idea on the industrialization process and positive assessments of the downsizing phenomenon in italy

prior to reshoring a duration analysis of foreign manufacturing ventures this paper throws light on the determinants of the duration of manufacturing offshore experiences by us and european firms prior to reshoring by applying survival analysis to a dataset of 249 offshoring experiences terminated with a relocation to the home country region we estimate the effects of different groups of survival determinants results highlight that contextual factors such as the industry the home country the host country and the size of the firm significantly affect the duration of offshoring experiences the likelihood of termination is in fact higher for the electronics and automotive industries for small firms for firms headquartered in europe and for offshoring to asia the analysis of the motivations for reshoring shows that quality issues experienced offshore emerge as the key factor giving rise to shorter offshore stays based on these empirical findings a set of testable propositions is developed in particular we conjecture that the likelihood of termination of offshore manufacturing and the return to the home country may be accelerated by technology based industries small firm sizes shrinking cost differentials and the psychic distance between home and host country the organizational archetypes and quality related motivations

firm entry and exit in the canadian manufacturing sector 1970 1982 this paper measures the importance of entry and exit to the canadian manufacturing sector in the 1970s it focuses on the size of entrants as they move from a stage of infancy to adolescence the exit rates of births their length of life and the growth path of entrants are presented distinctions are made between greenfield and merger entry while entrants are small at birth the cumulative effect of successive cohorts of entrants in the 1970s adds up to a significant fraction of all firms and total sales by 1979

internet start ups access to the bank loan market evidence from italy the analysis of the bank sector s ability to efficiently fuel the birth of new italian business ventures in internet related services is studied in particular through the specification and the estimate of a series of econometric models this paper aims at investigating which characteristics of a large sample of internet start ups and their relative founders facilitate access to the loan market more precisely the role played by founders human capital as a possible significant signal used by banks to evaluate investment projects is addressed estimation results suggest that highly qualified human resources possessed by internet founders do not represent an important driver for gaining access to bank credit and they do not affect the amount of the incurred debt

technology use and plant closure abstract this paper aims to contribute to the empirical literature on industrial demography it analyzes a stratified sample of the italian metalworking industry composed of 810 plants with more than 10 employees it considers plant closure over the period 1989 1997 probit type econometric models are estimated in order to provide evidence on the explanatory factors of the likelihood of closure with special attention being devoted to technological variables the paper extends previous empirical results along a number of directions first in spite of the fact that use of advanced technologies especially in the design and engineering sphere favors survival remarkable differences do emerge between different individual technologies ceteris paribus plants having adopted technologies characterized by sizable product specific investments turn out to be less likely to be shut down in addition the ownership status of plants is found to influence the probability of closure likelihood of survival is lower for plants that belong to multi unit organizations than for those owned by single plant firms even though the difference between the two plant categories decreases with plant size altogether such results point to the relevance of irreversibility and sunk costs for understanding exit behavior

patents and the survival of internet related ipos abstract we examine the effect of patenting on the survival prospects of 356 internet related firms that made an initial public offering on the nasdaq at the height of the stock market bubble of the late 1990s by march 2005 almost 2 3 of these firms had delisted from the exchange changes in the legal environment in the us in the 1990s made it much easier to obtain patents on software and ultimately on business methods though less than 1 2 of the firms in our sample obtained or attempted to obtain patents for those that did we hypothesize that patents conferred competitive advantages that translate into higher probability of survival though they may also simply be a signal of firm quality controlling for other determinants of firm survival patenting is positively associated with survival quite different processes appear to govern exit via acquisition compared to exit via delisting from the exchange due to business failure firms that applied for more patents were less likely to be acquired though if they obtain unusually highly cited patents they may be a more attractive acquisition target these findings do generally not hold true for business method patents which do not appear to confer a survival advantage

the impact of foreign direct investment on new firm survival in the uk evidence for static versus dynamic industries the paper examines the impact of foreign direct investment fdi on the survival of business start ups fdi has potential for both negative displacement competition effects as well as positive knowledge spillover and linkage effects on new ventures we find a net positive effect for the whole dataset however a major contribution of the paper is to outline and test an argument that this effect is likely to be comprised of a net negative effect in dynamic industries high churn firm entry plus exit relative to the stock of firms alongside a net positive effect in static low churn industries we find evidence to support this view the results identify new effects of globalisation on enterprise development with associated challenges for industrial policy

turbulence in growing and declining industries turbulence over the industry life cycle is examined for the case of portugal using the lowest possible level of industry aggregation thus allowing for the use of panel data to study the evolution of product markets replacement of exiting firms by subsequent entrants plays a primary role in generating turbulence in high growth markets while displacement of incumbents by recent entrants is the main selection force in declining markets as the industry life cycle progresses trial and error entry and entry mistakes decrease and turbulence subsides

comparative analysis of firm demographics and survival evidence from micro level sources in oecd countries in this paper we present cross country evidence on firm size distribution firm demographic and post entry performance for 10 oecd countries we use harmonized firm level data drawn from business registers or social security records these data enable international comparisons and the identification of idiosyncratic country effects while average firm size differs across countries due to both sectoral specialization and within sector characteristics we find similar degrees of firm churning across countries in most of them about 20 of firms enter and exit most markets every year and about 20 40 of entering firms fail within the first 2 years of life however post entry growth of successful entrants is much higher in the usa than in europe which may be indicative of barriers to firm growth as opposed to barriers to entry

start up size and post entry performance the case of tourism services in italy a large and comprehensive longitudinal database is used to identify the start up of new firms in the italian tourist industry and their subsequent post entry performance analysed in particular is the link between the survival of hotels restaurants and catering firms in each italian region and their start up size by using logit estimation it is found that for eighteen out of twenty regions the relationship has the expected sign although only for twelve regions and the country as a whole did it turn out to be statistically significant

inverted u relationship between r d intensity and survival evidence on scale and complementarity effects in uk data existing evidence on the relationship between rd ii rd and iii creative destruction as proxied by median r d intensity in the industry and the premium on business lending have negative effects on firm survival other findings concerning age size productivity relative growth pavitt technology classes and the macroeconomic environment are in line with the existing literature the results are strongly or moderately robust to different samples stepwise estimations and controls for frailty and left truncation

establishment exits in germany the role of size and age using comprehensive data for west germany this paper investigates the determinants of establishment exit we find that between 1975 and 2006 the average exit rate has risen considerably in order to test various liabilities of establishment survival identified in the literature we analyzed the impact of establishment size and put a special focus on differences between young and mature establishments our empirical analysis shows that the mortality risk falls with establishment size which confirms the liability of smallness the probability of exit is substantially higher for young establishments which are not more than 5 years old thus confirming the liability of newness there also exists a liability of aging since exit rates first decline over time reaching a minimum at ages 15 18 and then rise again somewhat the determinants of exit differ substantially between young and mature establishments suggesting that young establishments are more vulnerable in a number of ways

market selection along the firm life cycle this paper analyses market selection in french manufacturing goods markets over the last decade under the hypothesis that the competitive challenges which firms have to face may change along its life cycle we find that on average exiting firms display below average performance levels in terms of profitability and productivity moreover young firms are challenged not because of their relative efficiency they rapidly reveal themselves more efficient than old firms but in terms of industry concentration and turbulence this result reveals the presence of barriers to firm growth as an important driver of industry dynamics

the survival and growth of new establishments in sweden 1987 1995 the aim of the study is to examine the survival of new establishments and to identify factors affecting their survival probability and their employment growth this study uses a unique data set on all new establishments that were created in sweden 1987 and 1988 with the exception of the construction industry the results show among others that i new establishments face a high risk of closing down ii the probability of establishment survival increases with the age and size of the establishment iii variables that are assumed to measure access to resources being a part of a multi unit firm and being new due to merger or dispersal have a positive effect on survival iv the number of employees at the start up year has a negative effect on the employment growth and v demographic and educational factors are important in explaining survival and growth

longitudinal firm level data problems and solutions empirical measures of firm and employment dynamics based on administrative datasets are biased due to missing links in the longitudinal observation of firms this paper presents a systematic overview of the problems and evaluates two prevailing solutions we quantify the biases in a set of widely used empirical measures and show which estimates are most sensitive to missing linkages the biases are found to be especially large in the size distribution of entrants and exits in firm level growth estimates for medium and large firms and in job reallocation measures we show that an employee flow linkage method is more effective in reducing bias than a traditional link method often used by statistical agencies a consistent approach is developed for imputing firm level growth measures of linked firms the analysis is carried out using a longitudinal dataset for belgium and discussed from an international perspective

investment activity and the exit decision using level data from the u s steel industry this paper tests and finds support for the hypothesis that firms in a contracting industr y first disinvest from and then close their high cost plants an investment decision model is estimated using a panel data set composed of the major replacement investments made in forty three steel plants during the years 1960 81 the results indicate that the firms disinvested from those plants are least likely to remain profitable in an environment of strong competition from imports minimills and stagnating domestic demand copyright 1988 by mit press

impact of government intervention on employment change and plant closure in northern ireland 1983 97 harris r and trainor m 2007 impact of government intervention on employment change and plant closure in northern ireland 1983 97 regional studies 41 51 63 financial assistance to manufacturing industry is an important element of the industrial development policy in northern ireland this paper uses the individual plant level records of the annual respondents database ard for the northern ireland manufacturing sector 1983 97 matched to the plant level details of financial support provided by the industrial development board to examine the effect of selective financial assistance sfa on employment change and plant closure it is found that sfa concentrated on protecting existing rather than new enterprises in terms of employment change using a hazard model it is found that the receipt of sfa significantly reduced the probability of plant closure by on average between 15 and 24 harris r et trainor m 2007 l impact de l intervention gouvernementale sur l evolution de l emploi et la fe

determinants of firm start up size in the brazilian industry an empirical investigation the article investigates the determinants of newly created industrial establishments in brazil in 1997 taking as reference explanatory variables referring to market structure and industry dynamics stronger effects are detected for larger firms minimum efficient scale industry size industry growth and turbulence display the expected positive effects on firm size but the intensity of those are more pronounced for larger firms the suboptimal scale variable on the other hand exhibits a counterintuitive positive effect and perhaps other types of barriers to entry that are not related to scale aspects may be important in the brazilian case

is subsidizing entry an optimal policy public subsidies in support of new firm foundation are among the most frequently used instruments of industrial policy in the euro zone this paper analyses their effectiveness and efficiency vis a vis some features of the overall process of industry dynamics in italian manufacturing to this end the survival and growth patterns of new small firms are investigated using a unique dataset on electrical and electronic engineering in italy as regards survival our results confirm the findings of other studies namely that the hazard rates are particularly high in the early stages of firm s life cycle as far as growth is concerned the study s main finding is that gibrat s law fails to hold in the years immediately following start up when smaller firms must rush in order to achieve a size large enough to enhance their likelihood of survival conversely in later stages of firm s life cycle the law cannot be rejected these results radically question the use of subsidies as an optimal policy for the support of new entries since the subsidy brings about a major bias in the process of market selection including substitution and deadweight effects and hampers the post entry scale adjustment of newborn firms

the persistence of market leadership evidence from japan this article explores the persistence of market leadership in japanese manufacturing industries over the period 1975 2004 by applying survival data techniques we examine how long market leadership persists and how the duration of market leadership varies according to industry specific characteristics our findings indicate that market leaders maintain their leadership positions for on average 20 years from 1975 in japanese manufacturing industries we provide evidence that market leadership tends to persist in capital intensive and legally cartelized industries whereas it is less likely to persist in demand volatile r d intensive and import intensive industries copyright 2009 the author 2009 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

sectoral differences in plant start up size in the finnish economy new knowledge on the factors behind the choice of plant entry scale is important for understanding the entry process and the recruitment decisions of new plants in different sectors of the economy the purpose of this paper is to evaluate the effect of various industry attributes on plant start up size measured with employment using data on the entire finnish business sector the paper extends previous research by examining the differences between manufacturing and services and by using a richer set of explanatory variables the relative importance of the covariates for different sized entrants is taken into account by using a quantile regression approach the results for manufacturing and services are remarkably similar however the findings imply that in the future analysis it is also important to consider the effect of the regional availability of educated and experienced work force on plant start up size in these two sectors the findings on the importance of scale economies and industry turbulence in determining start up size correspond to the earlier studies the results also show that single plant and multiplant entrants face a rather different entry environment in addition the employment share of foreign owned entrants in the industry has to be taken into account

closure and divestiture by foreign entrants the impact of entry and post entry strategies we analyze the longevity of foreign entrants explicitly considering two possible ways of exit firm closure and capital divestiture we find that entry and post entry strategies affect the longevity of firms and of foreign equity holdings but in different manners while the ownership arrangements and organizational structure affect the likelihood of divestment they exert no significant effect upon closure the entry mode exerts opposite effects on the two modes of exit greenfield entrants being more likely to shutdown but less likely to be divested only human capital affects closure and divestment in the same manner firms with large endowments of human capital are less likely to exit irrespective of the exit mode considered copyright 2000 john wiley sons ltd

real options and foreign affiliate divestments a portfolio perspective this paper develops a real options portfolio perspective on foreign affiliate divestments affiliates are less likely to be divested in response to adverse environmental change if they represent growth or switch option value to the multinational firm under conditions of macroeconomic uncertainty however the affiliate is partially redundant to the option value of the multinational firm s affiliate portfolio if the affiliate shares the manufacturing platform role in the host country with other affiliates or if macroeconomic conditions of the host country are highly correlated with those of other countries in which the multinational firm operates affiliates we find strong support for these arguments in tests on a comprehensive sample of 1078 asian manufacturing affiliates of japanese electronics multinationals

the survival of new plants start up conditions and post entry evolution abstract this paper examines the longevity of entrants we find size to be an important determinant of the chances of survival this being particularly relevant to de novo entrants as compared with entry by established firms current size is also found to be a better predictor of failure than initial size moreover our findings indicate that after controlling for size differences past growth matters for survival suggesting a partial adjustment process for firm size in the post entry period finally new plants are more likely to live longer if they enter growing industries or industries with little entry activity

government payments and farm business survival using farm level panel data from recent u s agricultural censuses this study examines how direct government payments influence the survival of farm businesses paying particular attention to the differential effect of payments across farm size categories a cox proportional hazards model is used to estimate the effect of government payments on the instantaneous probability of a farm business failure controlling for farm and operator characteristics results indicate that an increase in government payments has a small but statistically significant negative effect on the rate of business failure and the magnitude of this effect increases with farm size

return migration and the survival of entrepreneurial activities in egypt summary the literature shows that temporary international migrants have a high propensity to opt for an entrepreneurial activity upon return but the prospects of survival of these activities have not been explored we address this research question using longitudinal egyptian data we find that entrepreneurs migration experience significantly improves the chances of survival of their entrepreneurial activities adopting econometric techniques that control for return migrants nonrandom selection in unobservables we resort to a bivariate probit model and a two stage residual inclusion estimator using the rate of population growth and the real oil price as alternative instruments for migration

multinational companies technology spillovers and plant survival how does the presence of multinational companies affect plant survival in the host country we postulate that multinational companies can impact positively on plant survival through technology spillovers we examine the nature of the effect of multinationals using a cox proportional hazard model which we estimate using plant level data for irish manufacturing industries our results show that the presence of multinationals has a life enhancing effect only on indigenous plants in high tech industries suggesting the presence of technology spillovers in contrast multinationals compete with each other in low tech sectors in the host country

consolidation by merger the uk beer market this paper examines the determinants of market structure in the uk brewing industry over 1949 1969 sutton sunk costs and market structure price competition advertising and the evolution of concentration 1991 points to technology and advertising races as two key drivers of market concentration this study uses an own built longitudinal data set of the population of firms and breweries and reveals the importance of institutional factors in explaining the dynamics of market structure the practice of tying outlets to brewers and legal restrictions on opening retail outlets together with a permissive policy towards mergers made acquisition of medium sized firms and brewery closure shortly after acquisition the main driving mechanism towards industry consolidation during this period the number of firms and plants fell sharply by 74 and 60 respectively and production rose by about 25 with no firm entry and just one new brewery opening as a result concentration increased and the market transformed from a highly fragmented one into a stable oligopoly

credit constraints and determinants of the cost of capital in vietnamese manufacturing this paper examines the extent to which borrowing constraints restrict firm access to credit and identifies individual firm and loan characteristics which determine the cost of capital in vietnamese manufacturing using direct information from a vietnamese enterprise survey the paper shows that between 14 and 25 of the enterprises are credit constrained and these enterprises would increase their debt holdings by between 40 and 115 if borrowing constraints were relaxed moreover it emerges that informal credit markets play an important role for fast growing firms enterprises do not appear to have the necessary time to go through the many administrative difficulties in the formal credit system if they want to seize the day finally collateralized loans face larger interest rates explained by the significant influence of policy lending in vietnamese credit markets