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The Effect of Industry, Region, and Time on New Business Survival – A Multi-Dimensional Analysis

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Author Info
Michael Fritsch ()
Udo Brixy
Oliver Falck

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Abstract

We analyze the effect of industry, region, and time on new business survival rates by means of a multi-dimensional approach. The data relate to West German districts in the 1983–2000 period. The survival chances of start-ups tend to be relatively low in industries characterized by a high minimum efficient size and high numbers of entries. We find that regional characteristics play a rather important role and that introducing the regional dimension leads to considerable improvements of the estimation results. The significance of the regional dimension is also reflected in a remarkably high level of neighborhood effects. Copyright Springer 2006

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File URL: http://hdl.handle.net/10.1007/s11151-006-0018-4
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Publisher Info
Article provided by Springer in its journal Review of Industrial Organization.

Volume (Year): 28 (2006)
Issue (Month): 3 (05)
Pages: 285-306
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:kap:revind:v:28:y:2006:i:3:p:285-306

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Web page: http://www.springerlink.com/link.asp?id=100336

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Related research
Keywords: Entry; hazard; market selection; new firm survival; D21; L10; M13; R10;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Winter, Sidney G., 1984. "Schumpeterian competition in alternative technological regimes," Journal of Economic Behavior & Organization, Elsevier, vol. 5(3-4), pages 287-320. [Downloadable!] (restricted)
  2. Boeri, Tito & Bellmann, Lutz, 1995. "Post-entry behaviour and the cycle: Evidence from Germany," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 483-500, December. [Downloadable!] (restricted)
  3. Boyan Jovanovic, 2001. "Fitness and Age: Review of Carroll and Hannan's Demography of Corporations and Industries," Journal of Economic Literature, American Economic Association, vol. 39(1), pages 105-119, March. [Downloadable!] (restricted)
  4. Michael Fritsch & Oliver Falck, 2003. "New Firm Formation by Industry over Space and Time: A Multi-Level Analysis," Discussion Papers of DIW Berlin 322, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  5. P.A. Geroski & José Mata & Pedro Portugal, 2007. "Founding Conditions and the Survival of New Firms," DRUID Working Papers 07-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies. [Downloadable!]
  6. David Audretsch & Patrick Houweling & A. Thurik, 2000. "Firm Survival in the Netherlands," Review of Industrial Organization, Springer, vol. 16(1), pages 1-11, February. [Downloadable!] (restricted)
  7. Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-59, November. [Downloadable!] (restricted)
  8. Alessandro STERLACCHINI, 1994. "The birth of new firms in Italian manufacturing," Working Papers 47, Universita' Politecnica delle Marche (I), Dipartimento di Economia.
  9. Steven Klepper & Kenneth L. Simons, 2000. "The Making of an Oligopoly: Firm Survival and Technological Change in the Evolution of the U.S. Tire Industry," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 728-760, August. [Downloadable!] (restricted)
  10. David B. Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor and Francis Journals, vol. 36(2), pages 113-124, April. [Downloadable!] (restricted)
  11. Audretsch, D.B. & Fritsch, M., 1993. "A Note on the Measurement of Entry Rates," Papers 93-5, Bergakademie Freiberg Technical University - Faculty of Economics and Business Administration.
  12. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932.
  13. Pekka Ilmakunnas & Jukka Topi, 1999. "Microeconomic and Macroeconomic Influences on Entry and Exit of Firms," Review of Industrial Organization, Springer, vol. 15(3), pages 283-301, November. [Downloadable!] (restricted)
    Other versions:
  14. Dunne, T. & Roberts, M.J., 1989. "Variation In Producer Turnover Across U.S. Manufacturing Industries," Papers 12-89-2, Pennsylvania State - Department of Economics.
  15. Grotz, Reinhold & Brixy, Udo, 2002. "Entry-rates, the share of surviving businesses and employment growth: differences between West and East Germany since unification," ERSA conference papers ersa02p175, European Regional Science Association. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Martina Kauffeld-Monz, 2005. "Knowledge spillovers within regional networks of innovation and the contribution made by public research," ERSA conference papers ersa05p440, European Regional Science Association. [Downloadable!]
  2. Elisabeth Müller & Volker Zimmermann, 2006. "The Importance of Equity Finance for R&D Activity – Are There Differences Between Young and Old Companies?," Discussion Papers 111, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
    Other versions:
  3. Yu, Li & Orazem, Peter & Jolly, Robert W., 2009. "Why Do Rural Firms Live Longer?," Staff General Research Papers 13085, Iowa State University, Department of Economics. [Downloadable!]
  4. Michael Fritsch & Pamela Mueller, 2008. "The effect of new business formation on regional development over time: the case of Germany," Small Business Economics, Springer, vol. 30(1), pages 15-29, January. [Downloadable!] (restricted)
  5. Czarnitzki, Dirk & Binz, Hanna L., 2008. "R&D Investment and Financing Constraints of Small and Medium-Sized Firm," ZEW Discussion Papers 08-047, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  6. Brixy, Udo & Sternberg, Rolf & Stüber, Heiko, 2008. "From potential to real entrepreneurship," IAB Discussion Paper 200832, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  7. Oliver Falck, 2005. "Survival Chances of Start-Ups - do Regional Conditions Matter?," ERSA conference papers ersa05p49, European Regional Science Association. [Downloadable!]
  8. Michael Fritsch & Pamela Mueller, 2005. "The Persistence of Regional New Business Formation-Activity over Time - Assessing the Potential of Policy Promotion Programs," Papers on Entrepreneurship, Growth and Public Policy 2005-02, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
    Other versions:
  9. Michael Fritsch & Pamela Mueller, 2004. "The Effects of New Business Formation on Regional Development over Time," Papers on Entrepreneurship, Growth and Public Policy 2004-36, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
  10. Christian Helmers & Mark Rogers, 2008. "Innovation and the Survival of New Firms Across British Regions," Economics Series Working Papers 416, University of Oxford, Department of Economics. [Downloadable!]
  11. Dirk Dohse & Tanja Staehler, 2008. "BioRegio, BioProfile and the Rise of the German Biotech Industry," Kiel Working Papers 1456, Kiel Institute for the World Economy. [Downloadable!]
  12. Falck, Oliver, 2005. "Das Scheitern junger Betriebe : ein Überlebensdauermodell auf Basis des IAB-Betriebspanels," IAB-Forschungsbericht 200513, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  13. Joachim Wagner, 2006. "Politikrelevante Folgerungen aus Analysen mit wirtschaftsstatistischen Einzeldaten der Amtlichen Statistik," Working Paper Series in Economics 16, University of Lüneburg, Institute of Economics. [Downloadable!]
  14. Block, Joern & Sandner, Philipp, 2006. "The Effect of Motivation on Self-Employment Duration in Germany: Necessity versus Opportunity Entrepreneurs," MPRA Paper 215, University Library of Munich, Germany. [Downloadable!]
  15. Miguel Manjón-Antolín & Josep-Maria Arauzo-Carod, 2008. "Firm survival: methods and evidence," Empirica, Springer, vol. 35(1), pages 1-24, March. [Downloadable!] (restricted)
  16. Block, Jörn H. & Sandner, Philipp G., 2007. "Necessity and Opportunity Entrepreneurs and their Duration in Self-employment: Evidence from German Micro Data," Discussion Papers in Business Administration 2082, University of Munich, Munich School of Management. [Downloadable!]
    Other versions:
  17. Michael Fritsch & Pamela Mueller, 2006. "The Effect of New Business Formation on Regional Development over Time: The Case of Germany," Papers on Entrepreneurship, Growth and Public Policy 2006-19, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group. [Downloadable!]
  18. Fernando Munoz-Bullon & Begona Cueto Iglesias, 2008. "The sustainability of start-up firms among formerly wage workers," Business Economics Working Papers wb083108, Universidad Carlos III, Departamento de Economía de la Empresa. [Downloadable!]
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