Advanced Search
MyIDEAS: Login

Business demography in Spain: determinants of firm survival

Contents:

Author Info

  • Paloma López-García

    ()
    (Banco de España)

  • Sergio Puente

    ()
    (Banco de España)

Abstract

The impact of entry upon market performance depends not only on the number of entries and their size, but also on how long do the firms last. Consequently, there are an increasing number of papers, most of them focused on the United States and restricted to the manufacturing sector, aimed at analysing the post entry performance of firms. Unfortunately, there is not much about this important topic in Spain due to the lack of appropriate longitudinal micro data on firms. The current paper aims to fill this gap by means of a new database covering all sectors of the business economy constructed at the Bank of Spain. We study the determinants of new firm survival using non parametric and parametric procedures especially designed to analyse duration phenomena. We find that larger start ups survive longer and that the probability of exit is larger in sectors with high entry rates and low concentration. One of the contributions of the paper is the inclusion of the initial firm's financial structure among the determinants of survival. Our results suggest that holding debt, instead of equity, has positive and important effects on survival up to some point. Beyond this point, further debt increments have a negative impact on survival, and this effect is more important the higher is the corresponding debt ratio or indebtness of the firm.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/06/Fic/dt0608e.pdf
File Function: First version, April 2006
Download Restriction: no

Bibliographic Info

Paper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0608.

as in new window
Length: 46 pages
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:bde:wpaper:0608

Contact details of provider:
Email:
Web page: http://www.bde.es/
More information through EDIRC

Related research

Keywords: firm survival; entry and exit; micro-data;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. J. Ignacio Garcia-Perez & Juan F. Jimeno, 2007. "Public Sector Wage Gaps In Spanish Regions," Manchester School, University of Manchester, vol. 75(4), pages 501-531, 07.
  2. Fabiani, S. & Druant, M. & Hernando, I. & Kwapil, C. & Landau, B. & Loupias, C. & Martins, F. & Mathä, T. & Sabbatini, R. & Stahl, H. & Stockman, A., 2005. "The Pricing Behaviour of Firms in the Euro Area: New Survey Evidence," Working papers 135, Banque de France.
  3. Álvarez, L. & Dhyne, E. & Hoeberichts, M. & Kwapil, C. & Le Bihan, H. & Lünnemann, P. & Martins, F. & Sabbatini, R. & Stahl,H. & Vermeulen, P. & Vilmunen, J., 2005. "Sticky Prices in the Euro Area: A Summary of New Micro Evidence," Working papers 138, Banque de France.
  4. José M. Campa & Linda S. Goldberg & José M. González-Mínguez, 2005. "Exchange rate pass through to import prices in the euro area," Banco de Espa�a Working Papers 0538, Banco de Espa�a.
  5. Enrique Alberola & Luis Molina & Daniel Navia, 2005. "Say you fix, enjoy and relax: the deleterious effect of peg announcements on fiscal discipline," Banco de Espa�a Working Papers 0523, Banco de Espa�a.
  6. Arturo Galindo & Alejandro Izquierdo & José Manuel Montero, 2006. "Real Exchange Rates, Dollarization and Industrial Employment in Latin America ," IDB Publications 6837, Inter-American Development Bank.
  7. Fabiani, Silvia & Druant, Martine & Hernando, Ignacio & Kwapil, Claudia & Landau, Bettina & Loupias, Claire & Martins, Fernando & Matha, Thomas & Sabbatini, Roberto & Stahl, Harald & Stokman, Ad, 2006. "What Firms' Surveys Tell Us about Price-Setting Behavior in the Euro Area," MPRA Paper 808, University Library of Munich, Germany.
  8. Dolado, Juan J. & Jansen, Marcel & Jimeno, Juan F., 2005. "Dual Employment Protection Legislation: A Framework for Analysis," IZA Discussion Papers 1564, Institute for the Study of Labor (IZA).
  9. Javier Andrés & David López-Salido & Edward Nelson, 2005. "Sticky-Price Models and the Natural Rate Hypothesis," Banco de Espa�a Working Papers 0521, Banco de Espa�a.
  10. Máximo Camacho & Gabriel Pérez-Quirós, 2005. "Jump-and-rest effect of U.S. business cycles," Banco de Espa�a Working Papers 0507, Banco de Espa�a.
  11. Berben, Robert-Paul & Locarno, Alberto & Morgan, Julian & Vallés, Javier, 2004. "Cross-country differences in monetary policy transmission," Working Paper Series 0400, European Central Bank.
  12. Luis J. Álvarez & Ignacio Hernando, 2005. "The price setting behaviour of Spanish firms: evidence from survey data," Banco de Espa�a Working Papers 0537, Banco de Espa�a.
  13. Álvarez, Luis J. & Burriel, Pablo & Hernando, Ignacio, 2005. "Price setting behaviour in Spain: evidence from micro PPI data," Working Paper Series 0522, European Central Bank.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Alcina Nunes & Elsa Sarmento, 2010. "Business Demography Dynamics In Portugal: A Non-Parametric Survival Analysis," GEE Papers 0022, Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação, revised Sep 2010.
  2. Jeong-Dong Lee, 2009. "Industry Dynamics and Productivity Research," TEMEP Discussion Papers 200929, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Nov 2009.
  3. Alcina Nunes & Elsa Sarmento, 2010. "Business Demography Dynamics in Portugal: a Semi-parametric Survival Analysis," GEE Papers 0023, Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação, revised Sep 2010.
  4. Ángel Estrada, 2009. "The mark-ups in the Spanish economy: international comparison and recent evolution," Banco de Espa�a Working Papers 0905, Banco de Espa�a.
  5. Elsa de Morais Sarmento & Alcina Nunes, 2012. "The Dynamics of Employer Entreprise Creation in Portugal Over the Last Two Decades: A Firm Size, Regional and Sectoral Perspective," Notas Económicas, Faculdade de Economia, Universidade de Coimbra, issue 36, pages 6-22, December.
  6. Bastié Françoise & Cieply Sylvie & Cussy Pascal, 2011. "The Survival of New Firms: Do Bank Loans at Birth Matter?," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201110, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  7. Elsa Sarmento & Alcina Nunes, 2010. "Comparative Survival Analysis of Firms: the case of the Portuguese North region," Working Papers de Economia (Economics Working Papers) 53, Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro.
  8. Alcina Nunes & Elsa de Morais Sarmento, 2010. "Business Survival in Portuguese Regions," GEMF Working Papers 2010-22, GEMF - Faculdade de Economia, Universidade de Coimbra.
  9. K. Liczmanska & A.M. Wisniewska, 2013. "A strong brand as a determinant of purchase the case of sectors, where advertising in mass media is banned – on the example of the Polish spirits sector," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 83-98.
  10. Elsa de Morais Sarmento & Alcina Nunes, 2011. "Criação de empresas em Portugal e Espanha: análise comparativa com base nos dados do Banco Mundial," GEE Papers 0036, Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação, revised May 2011.
  11. Elsa Morais Sarmento & Alcina Nunes, 2010. "Análise comparativa de sobrevivência empresarial: o caso da região Norte de Portugal," GEE Papers 0028, Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação, revised Dec 2010.
  12. Håkansson, Johan & Macuchova, Zuzana & Rudholm, Niklas, 2013. "Predicting Entry of Swedish Wholesale Firms into Local Markets," HUI Working Papers 93, HUI Research.
  13. Henryk Gurgul & Marcin Suder, 2013. "Modeling of withdrawals from selected ATMs of the "Euronet" network," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 65-82.
  14. Miguel García-Posada & Juan S. Mora-Sanguinetti, 2014. "Entrepreneurship and enforcement institutions: Disaggregated evidence for Spain," Banco de Espa�a Working Papers 1405, Banco de Espa�a.
  15. Juan Felipe Parra, 2011. "Determinantes de la probabilidad de cierre de nuevas empresas en Bogotá," REVISTA FACULTAD DE CIENCIAS ECONÓMICAS, UNIVERSIDAD MILITAR NUEVA GRANADA.
  16. Pawel Zajac, 2013. "The New Approach to estimation of the Hazard Function in Business Demography on example of Data from New Zealand," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 99-110.
  17. Joanna Duda, 2013. "The Role of Bank Credits in Investment Financing of the Small and Medium-sized Enterprise Sector in Poland," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 7-20.
  18. Henryk Gurgul & Roland Mestel & Robert Syrek, 2013. "The testing of causal stock returns-trading volume dependencies with the aid of copulas," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 21-44.
  19. Medvedev, Denis & Oviedo, Ana Maria, 2013. "Informality and profitability : evidence from a new firm survey in Ecuador," Policy Research Working Paper Series 6431, The World Bank.
  20. World Bank, 2012. "Ecuador : The Faces of Informality (Las Caras de La Informalidad)," World Bank Other Operational Studies 13252, The World Bank.
  21. Henryk Gurgul & Machno Artur & Roland Mestel, 2013. "Modeling of returns and trading volume by regime switching copulas," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 45-64.
  22. Massón Guerra, José Luis, 2007. "El capital empresarial como determinante de la productividad y el crecimiento en España
    [The Impact of Entrepreneurship Capital on Spanish's Labor Productivity and Economic Growth]
    ," MPRA Paper 4073, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bde:wpaper:0608. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mar�a Beiro. Electronic Dissemination of Information Unit. Research Department. Banco de Espa�a).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.