The Interrelationships between Births and Deaths
This paper provides a preliminary study of the way in which the births and deaths of firms interact over time. It uses the retailing sector as a case study, although the results also have relevance for other sectors. Section I of the paper introduces the background to the paper. Section II provides a non mathematical theoretical framework for analyzing the births/deaths interrelationship. It identifies three separate types of effect operative in these interrelationships: the "competition", "multiplier" and Marshall ("life cycle") effects. The data used in this study (Value Added Tax registrations and deregistrations) and their limitations are considered in Section III. Section IV presents the preliminary empirical results. This section utilizes panel data vector autoregression techniques to identify the salient birth-death relationships. The final section concludes the paper and draws out possible policy conclusions. It also suggests avenues for further work. Copyright 1994 by Kluwer Academic Publishers
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