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Survival of Service Firms in European Emerging Economies

Author

Listed:
  • Iwasaki, Ichiro
  • Kočenda, Evžen

Abstract

Using a dataset of 126,591 service firms in 17 European emerging economies, this paper aims to estimate firm survivability in the years 2007–2015 and examine its determinants. We found that 31.3%, or 39,557 firms, failed during the observation period. At the same time, however, the failure risk greatly differed among regions, perhaps due to the remarkable gap in the progress of economic and political reforms. Moreover, the results of survival analysis revealed that large shareholding, labor productivity, and firm age played strong roles in preventing business failure beyond differences in regions and sectors.

Suggested Citation

  • Iwasaki, Ichiro & Kočenda, Evžen, 2018. "Survival of Service Firms in European Emerging Economies," CEI Working Paper Series 2018-7, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:hitcei:2018-7
    as

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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/29441/1/wp2018-7.pdf
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    References listed on IDEAS

    as
    1. Hanousek, Jan & Kočenda, Evžen & Shamshur, Anastasiya, 2015. "Corporate efficiency in Europe," Journal of Corporate Finance, Elsevier, vol. 32(C), pages 24-40.
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    3. Gleb Lanine & Rudi Vander Vennet, 2007. "Microeconomic determinants of acquisitions of Eastern European banks by Western European banks1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15(2), pages 285-308, April.
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    5. Rodolphe Durand & Vicente Vargas, 2003. "Ownership, Organization, and Private Firm's efficient use of resources," Post-Print hal-00699294, HAL.
    6. repec:taf:apeclt:v:23:y:2016:i:6:p:457-460 is not listed on IDEAS
    7. Miguel Manjón-Antolín & Josep-Maria Arauzo-Carod, 2008. "Firm survival: methods and evidence," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 35(1), pages 1-24, March.
    8. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    9. Amorim Varum, Celeste & Rocha, Vera Catarina, 2012. "The effect of crises on firm exit and the moderating effect of firm size," Economics Letters, Elsevier, vol. 114(1), pages 94-97.
    10. Laura Alfaro & Maggie Xiaoyang Chen, 2012. "Surviving the Global Financial Crisis: Foreign Ownership and Establishment Performance," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 30-55, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    European emerging economies; Service industry; Survival analysis; Cox proportional hazards model;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G01 - Financial Economics - - General - - - Financial Crises
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • L89 - Industrial Organization - - Industry Studies: Services - - - Other
    • P34 - Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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