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Sectoral Differences in Plant Start-up Size in the Finnish Economy

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  • Satu Nurmi

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    Abstract

    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. Copyright Springer 2006

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    File URL: http://hdl.handle.net/10.1007/s11187-004-6482-z
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    Bibliographic Info

    Article provided by Springer in its journal Small Business Economics.

    Volume (Year): 26 (2006)
    Issue (Month): 1 (02)
    Pages: 39-60

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    Handle: RePEc:kap:sbusec:v:26:y:2006:i:1:p:39-60

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    Web page: http://www.springerlink.com/link.asp?id=100338

    Related research

    Keywords: entry; industry differences; quantile regression; start-up size; J21; J23; L11; L25;

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    1. Lucy Chennells & John Van Reenen, 1999. "Has technology hurt less skilled workers? A survey of the micro-econometric evidence," IFS Working Papers, Institute for Fiscal Studies W99/27, Institute for Fiscal Studies.
    2. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Entry, Exit and Establishment Survival in UK Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 91-112, 03.
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    Cited by:
    1. Alex Coad & Julian Frankish & Paul Nightingale & Richard G. Roberts & David J. Storey, 2012. "Business Experience and Start-up Size: Buying More Lottery Tickets Next Time Around?," SPRU Working Paper Series 203, SPRU - Science and Technology Policy Research, University of Sussex.
    2. C. Mirjam van Praag & Peter H. Versloot, 2007. "What is the Value of Entrepreneurship? A Review of Recent Research," Tinbergen Institute Discussion Papers 07-066/3, Tinbergen Institute.
    3. Pei-Chou Lin & Deng-Shing Huang, 2008. "Technological Regimes and Firm Survival: Evidence Across Sectors and Over Time," Small Business Economics, Springer, Springer, vol. 30(2), pages 175-186, February.
    4. Seyit Cilasun & Burak G├╝nalp, 2012. "An Empirical Analysis of the Average Plant Start-Up Size in Turkish Manufacturing Industries," Review of Industrial Organization, Springer, vol. 40(4), pages 273-289, June.
    5. Pei-Chou Lin & Deng-Shing Huang, 2006. "Technological Regimes and Firm Survival: Evidence across Sectors and over Time," IEAS Working Paper : academic research 06-A012, Institute of Economics, Academia Sinica, Taipei, Taiwan.

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