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Entry and Exit Dynamics in Austrian Manufacturing

Author

Listed:
  • Werner Hölzl

    () (Vienna University of Economics & B.A.)

  • Sögner Leopold

    () (Vienna University of Technology)

Abstract

This article investigates the determinants of entry and exit in the Austrian manufacturing sector based on 1981 to 1994 data. We study the response of entry, exit and other indicators of firm dynamics to changes in average plant size, size heterogeneity, concentration, incentives and vertical integration. By applying Bayesian simulation methods we estimate random coefficient models and study the symmetry of the determinants of entry and exit. Our empirical analysis shows that entry and exit rates are driven by the same determinants. The impacts of these determinates are nearly homogeneous for both, entry rates and exits rates, respectively. Moreover, we find (i) that changes in average plant size, size heterogeneity and concentration are not symmetric with respect to entry and exit, (ii) that changes in the growth of sales is weakly symmetric and (iii) that the growth rate of employment is strongly asymmetric across industries in Austrian manufacturing. Furthermore, we infer from the data that the turnover of firms influences the changes in the number of competitors. Low entry rates go hand in hand with low net entryrates and a low turnover.

Suggested Citation

  • Werner Hölzl & Sögner Leopold, 2004. "Entry and Exit Dynamics in Austrian Manufacturing," Working Papers geewp36, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
  • Handle: RePEc:wiw:wiwgee:geewp36
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    References listed on IDEAS

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    More about this item

    Keywords

    Entry; Exit; Industry Turbulence; MCMC;

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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