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Dynamic Entry and Exit Linkages in the Brazilian Manufacturing Industry: An Econometric Investigation

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  • Marcelo Resende
  • Eduardo P. Ribeiro
  • Rodrigo Zeidan

Abstract

The paper investigates dynamic linkages between entry and exit rates in Brazilian manufacturing in the context of 231 (four-digit) industries during the 1996-2005 period. The empirical analysis focuses on the estimation of a dynamic panel data model for entry and exit rates, and controls for the business cycle and structural characteristics, such as industrial concentration and suboptimal scale. The empirical evidence is partially consistent with a multiplier effect where synergetic factors prevail by exit inducing exit. Evidence partially supports a competition effect that could be related to a selection process favoring efficiency, as exit induces entry. The business cycle control variable and the aforementioned structural variables appear to play no role in delineating entry and exit linkages. The results are similar, although not identical, to previous evidence for developed countries.

Suggested Citation

  • Marcelo Resende & Eduardo P. Ribeiro & Rodrigo Zeidan, 2015. "Dynamic Entry and Exit Linkages in the Brazilian Manufacturing Industry: An Econometric Investigation," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 22(3), pages 379-392, November.
    • Handle: RePEc:taf:ijecbs:v:22:y:2015:i:3:p:379-392
    DOI: 10.1080/13571516.2015.1009684
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    Cited by:

    1. Marcelo Resende & Vicente Cardoso & Luis Otávio Façanha, 2016. "Determinants of survival of newly created SMEs in the Brazilian manufacturing industry: an econometric study," Empirical Economics, Springer, vol. 50(4), pages 1255-1274, June.
    2. Eduardo Pontual Ribeiro, 2018. "Merger Employment Effects In Private Higher Education," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 231, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    3. Marta Bisztray, 2016. "The effect of foreign-owned large plant closures on nearby firms," CERS-IE WORKING PAPERS 1623, Institute of Economics, Centre for Economic and Regional Studies.
    4. Valérie Revest & Alessandro Sapio, 2019. "Alternative equity markets and firm creation," Journal of Evolutionary Economics, Springer, vol. 29(3), pages 1083-1118, July.
    5. Valérie Revest & Alessandro Sapio, 2019. "Alternative equity markets and firm creation," Post-Print halshs-02169726, HAL.

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    More about this item

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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