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Selection dynamics in the manufacturing industry during the crisis years: some evidences based on microdata

Author

Listed:
  • Marco Mariani

    () (Istituto Regionale per la Programmazione Economica della Toscana)

  • Elena Pirani

    () (Istituto Regionale per la Programmazione Economica della Toscana)

  • Elena Radicchi

    () (University of Florence)

Abstract

The economic crisis of the late 2000s has led many manufacturing companies to exit the market, due to poor performance or financial difficulties. The purpose of this study is to analyze which characteristics, both static and dynamic, play a role in the shaping of the firms’ exit decision. For this goal, we apply survival analysis techniques to an Italian regional case study, Tuscany, accounting for features of the firms observed both before and during the early years of the crisis. Our findings evidence that the selection process hits companies belonging to supplier-dominated sectors and industrial districts and, more in general, firms that before the crisis were already characterized by a low level of productivity or a poor overall efficiency. Results also suggest that lack of liquidity and inability to cover interest expenses are likely to bring to the exit during the crisis.

Suggested Citation

  • Marco Mariani & Elena Pirani & Elena Radicchi, 2012. "Selection dynamics in the manufacturing industry during the crisis years: some evidences based on microdata," Studi e approfondimenti 361, Istituto Regionale per la Programmazione Economica della Toscana.
  • Handle: RePEc:irp:essays:361
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    More about this item

    Keywords

    business demography; survival; economic crisis;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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