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Business Demography Dynamics in Portugal: A Semi-Parametric Survival Analysis

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  • Alcina Nunes

    ()
    (ESTG, Instituto Politécnico de Bragança and GEMF/Faculdade de Economia da Universidade de Coimbra, Portugal)

  • Elsa Sarmento

    (Departamento de Economia e Gestão da Universidade de Aveiro, Portugal)

Abstract

We address the post-entry performance of new Portuguese firms by investigating the structural characteristics of the hazard and survival functions, using semi-parametric survival analysis for the total economy and its broad sectors. In order to approach the prevalence of some stylized facts and determinants of new firm survival, a new entrepreneurship database was produced, using the administrative data of Quadros de Pessoal, following the Eurostat/OECD´s internationally comparable business demography methodology. In line with the literature, we find that firms that start small and experience faster post-entry growth, face a higher probability of survival. Firm’s current size dimension matters particularly for the Services sector probability of survival. In industries characterized by high entry rates, post-entry survival is more difficult. This happens mostly in Agriculture and the Construction sectors in Portugal. We find a different result from the literature, for the effect of industry growth in survival rates. Firms operating in industries which are growing faster, seem to suffer from a higher probability of failure. The combined effect of turbulence and entry and growth variables help explaining this unexpected effect of industry growth on survival probabilities. By correcting heterogeneity, we obtain stronger magnitudes of the hazard ratios found previously.

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Bibliographic Info

Paper provided by GEMF - Faculdade de Economia, Universidade de Coimbra in its series GEMF Working Papers with number 2010-10.

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Length: 23 pages
Date of creation: Jun 2010
Date of revision:
Handle: RePEc:gmf:wpaper:2010-10

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  1. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2005. "Comparative analysis of firm demographics and survival: evidence from micro-level sources in OECD countries," Industrial and Corporate Change, Oxford University Press, vol. 14(3), pages 365-391, June.
  2. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2009. "Measuring and Analyzing Cross-country Differences in Firm Dynamics," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 15-76 National Bureau of Economic Research, Inc.
  3. Lu�s M B Cabral & Jos� Mata, 2003. "On the Evolution of the Firm Size Distribution: Facts and Theory," American Economic Review, American Economic Association, vol. 93(4), pages 1075-1090, September.
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  6. Zoltan Acs & Sameeksha Desai & Leora Klapper, 2008. "What does “entrepreneurship” data really show?," Small Business Economics, Springer, vol. 31(3), pages 265-281, October.
  7. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-45, September.
  8. Luís Cabral, 2007. "Small firms in Portugal: a selective survey of stylized facts, economic analysis, and policy implications," Portuguese Economic Journal, Springer, vol. 6(1), pages 65-88, April.
  9. Brito, Paulo & Mello, Antonio S., 1995. "Financial constraints and firm post-entry performance," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 543-565, December.
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  11. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
  12. 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.
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Cited by:
  1. Michael Fritsch & Florian Noseleit & Yvonne Schindele, 2014. "Surviving Against the Tide: Are New Businesses in Innovative Industries Less Affected by General Economic Trends?," Jena Economic Research Papers 2014-017, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  2. 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.
  3. 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.
  4. 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.
  5. Alcina Nunes & Elsa de Morais Sarmento, 2010. "Business Survival in Portuguese Regions," GEMF Working Papers 2010-22, GEMF - Faculdade de Economia, Universidade de Coimbra.
  6. Elsa Morais Sarmento & Alcina Nunes, 2011. "Survival dynamics in Portugal, a regional perspective," ERSA conference papers ersa10p1313, European Regional Science Association.
  7. 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.

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