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Do Services Differ From Manufacturing? The Post-Entry Performance of Firms in Dutch Services

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Author Info
Audretsch, David B
Klomp, Luuk
Thurik, A R Roy

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Abstract

A large literature has emerged focusing on the post-entry performance of firms and, in particular, on the links between firm growth, survival, size and age. While these studies have resulted in findings that are sufficiently consistent as to constitute stylized facts, virtually all of these studies are based on manufacturing. The purpose of this paper is to fill this gap in knowledge about the role of non-manufacturing in industrial organization and, in particular, in the post-entry performance of firms, or what happens to firms subsequent to entering an industry. We suggest theoretical reasons why the relationships between firm age and size on the one hand, and survival and growth on the other may, in fact, not be the same in services as they are for manufacturing. We use a longitudinal database for Dutch firms in the retail and hotel and catering sectors to identify around 13,000 new-firm start-ups and 47,000 incumbents in the services and track them over subsequent years. We are then able test to see whether the stylized results identified, based on manufacturing, still hold in the services. The results suggest that the most fundamental relationships between firm size, age, survival and growth are strikingly different for services than for manufacturing. In terms of the dynamics of industrial organization, services may, in fact, not simply mirror the manufacturing sector.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1718.

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Date of creation: Nov 1997
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Handle: RePEc:cpr:ceprdp:1718

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Related research
Keywords: Growth; Services; Survival;

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Find related papers by JEL classification:
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
L80 - Industrial Organization - - Industry Studies: Services - - - General

References listed on IDEAS
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    Other versions:
  7. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May. [Downloadable!] (restricted)
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  16. Audretsch, David B & Mahmood, Talat, 1995. "New Firm Survival: New Results Using a Hazard Function," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 97-103, February. [Downloadable!] (restricted)
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  20. Kleijweg, A.J.M. & Lever, M.H.C., 1994. "Entry and Exit in Dutch Manufacturing Industries," Papers 9409-e, Research Institute for Small and Midium Sized Business - Research Report.
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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. Stam, Erik, 1999. "The spatial and sectoral pattern of fast-growing young firms in the Netherlands: Theoretical background and analysis," ERSA conference papers ersa99pa312, European Regional Science Association. [Downloadable!]
  2. Harald Strotmann & Andreas Koch, 2005. "The Impact of Functional Integration and Spatial Proximity on the Post-entry Performance of Knowledge Intensive Business Service Firms," IAW Discussion Papers 18, Institut für Angewandte Wirtschaftsforschung (IAW). [Downloadable!]
  3. Patrick Paul Walsh, 2000. "Sunk Costs and the Growth and Failure of Small Business," Trinity Economics Papers 20002, Trinity College Dublin, Department of Economics. [Downloadable!]
  4. Giunta, Anna & Nifo, Annamaria & Scalera, Domenico, 2009. "Subcontracting in the Italian industry. Labour Division, Firms’ Growth and North-South Divide," MPRA Paper 13084, University Library of Munich, Germany. [Downloadable!]
  5. Otto, Anne & Fornahl, Dirk, 2008. "Long-term growth determinants of young businesses in Germany : effects of regional concentration and specialisation," IAB Discussion Paper 200813, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  6. Robert M. Feinberg, 2009. "Do International Shocks Affect Small Wholesalers and Retailers?," Working Papers 2009-02, American University, Department of Economics. [Downloadable!]
  7. Harald Strotmann & Andreas Koch, 2005. "Determinants of Innovative Activity in Newly Founded Knowledge Intensive Business Service Firms," IAW Discussion Papers 21, Institut für Angewandte Wirtschaftsforschung (IAW). [Downloadable!]
  8. Anne Otto & Dirk Fornahl, 2009. "Cohesion Policy:Methodology And Indicators Towards Common Approach," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 3(1), pages 1-35, JUNE. [Downloadable!]
  9. Martin Carree & Marcus Dejardin, 2007. "‘Entry Thresholds and Actual Entry and Exit in Local Markets’," Small Business Economics, Springer, vol. 29(1), pages 203-212, June. [Downloadable!] (restricted)
    Other versions:
  10. Harald Strotmann, 2007. "Entrepreneurial Survival," Small Business Economics, Springer, vol. 28(1), pages 87-104, January. [Downloadable!] (restricted)
  11. Andrew Eckert & Douglas West, 2008. "Firm Survival and Chain Growth in a Privatized Retail Liquor Store Industry," Review of Industrial Organization, Springer, vol. 32(1), pages 1-18, February. [Downloadable!] (restricted)
  12. Esther Gordo & Javier Jareño & Alberto Urtasun, 2006. "Radiografía del sector servicios en España," Banco de España Occasional Papers 0607, Banco de España. [Downloadable!]
  13. Takehiko Yasuda, 2005. "Firm Growth, Size, Age and Behavior in Japanese Manufacturing," Small Business Economics, Springer, vol. 24(1), pages 1-15, December. [Downloadable!] (restricted)
  14. José García-Quevedo & Francisco Mas-Verdú, 2008. "Does only size matter in the use of knowledge intensive services?," Small Business Economics, Springer, vol. 31(2), pages 137-146, August. [Downloadable!] (restricted)
  15. Harald Strotmann, 2002. "Determinanten des Überlebens von Neugründungen in der badenwürttembergischen Industrie. Eine empirische Survivalanalyse mit amtlichen Betriebsdaten," IAW Discussion Papers 06, Institut für Angewandte Wirtschaftsforschung (IAW). [Downloadable!]
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