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Trade exposure, survival and growth of small and medium-size firms

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  • Álvarez, Roberto
  • Vergara, Sebastián

Abstract

In this paper we analyze the relationship between survival, employment growth and firm size in Chile, an economy that has reduced largely its trade barriers in the last three decades. We are particularly interested in analyzing whether the small and medium sized enterprises (SMEs) in the manufacturing sector have experienced negative effects on their survival probability and employment growth over time. Our results do not suggest that higher trade exposure affects negatively the SMEs performance. To better identify these effects, we exploit differences in trade flows across manufacturing industries. We find that SMEs are more likely to survive in industries with higher exposure to international trade. In terms of employment growth, we do not find that SMEs are more negatively affected by higher international competition.

Suggested Citation

  • Álvarez, Roberto & Vergara, Sebastián, 2013. "Trade exposure, survival and growth of small and medium-size firms," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 185-201.
  • Handle: RePEc:eee:reveco:v:25:y:2013:i:c:p:185-201
    DOI: 10.1016/j.iref.2012.07.010
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    Cited by:

    1. Calá, Carla Daniela, 2014. "Regional issues on firm entry and exit in Argentina: core and peripheral regions," Nülan. Deposited Documents 2023, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    2. Yang, Zhaojun & Zhang, Chunhong, 2015. "Two new equity default swaps with idiosyncratic risk," International Review of Economics & Finance, Elsevier, vol. 37(C), pages 254-273.
    3. Kao, Chun-Lin & Chen, Ming-Yuan, 2020. "Employee downsizing, financial constraints, and production efficiency of firms," International Review of Economics & Finance, Elsevier, vol. 68(C), pages 59-73.
    4. Vergara, Sebastián, 2013. "The performance of transnational corporations: Evidence for the manufacturing industry in Chile," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    5. Calá, Carla Daniela, 2015. "Firm dynamics in developing countries: a single policy for all regions?," Nülan. Deposited Documents 2650, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    6. Huang, Yo-Yi & Huang, Deng-Shing, 2014. "Big vs. small under free trade: Market size and size distribution of firms," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 175-189.
    7. Calá, Carla Daniela & Manjón-Antolín, Miguel & Arauzo-Carod, Josep-Maria, 2017. "Regional determinants of exit across firms' size: evidence from a developing country," Nülan. Deposited Documents 2548, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    8. Carla Calá & Josep-Maria Arauzo-Carod & Miguel Manjón-Antolín, 2015. "The determinants of exit in a developing country: core and peripheral regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 927-944, May.
    9. Calá, Carla Daniela & Manjón Antolín, Miguel C. & Arauzo Carod, Josep Maria, 2014. "The Determinants of Exit in Argentina: Core and Peripheral Regions," Working Papers 2072/225299, Universitat Rovira i Virgili, Department of Economics.
    10. Calá, Carla Daniela, 2018. "Sectoral and regional determinants of firm dynamics in developing countries: evidence for low-, mediumand high-tech manufacturing in Argentina," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.

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    More about this item

    Keywords

    SMEs; Trade liberalization; Survival; Firm growth;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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