Firm Competitive Strategies And The Likelihood Of Survival - The Spanish Case
This paper, based on the ideas of Jovanovic’s theory (1982), analyses the impact of the main strategies determining the competitive behaviour of firms on their survival rate. We consider those strategies related both to product and price differentiation. Among the former ones, one may think of the specific differentiation due to advertisement and patent expenses or the technological differentiation based on R&D expenses or new production processes. Among the strategies of the second group, some are based on capital accumulation, or advantages of fixed costs such as scale economies or absolute cost advantages thanks to production techniques introduced by experience of by process innovations. The use of these strategies in a set of Spanish manufacturing firms (1990-2001) is analyzed. Firstly, several non-parametric tests for equality of survival functions are computed to check the diversity of survival rates across different competitive characteristics of firms. Secondly, a duration model based on a hazard rate model is estimated to study the impact of the main competitive strategies on firm survival. We find that several aspects on the competitive advantage of the firms play an important role in the likelihood of firm survival. Finally, we also conclude that there exists a different competitive strategy having into account two different size groups of firms.
|Date of creation:||Aug 2005|
|Date of revision:|
|Contact details of provider:|| Postal: Welthandelsplatz 1, 1020 Vienna, Austria|
Web page: http://www.ersa.org
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Agarwal, Rajshree & Audretsch, David B, 2001. "Does Entry Size Matter? The Impact of the Life Cycle and Technology on Firm Survival," Journal of Industrial Economics, Wiley Blackwell, vol. 49(1), pages 21-43, March.
- David Audretsch & Patrick Houweling & A. Thurik, 2000. "Firm Survival in the Netherlands," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 16(1), pages 1-11, February.
- Tveteras, Ragnar & Eide, Geir Egil, 2000. "Survival of New Plants in Different Industry Environments in Norwegian Manufacturing: A Semi-proportional Cox Model Approach," Small Business Economics, Springer, vol. 14(1), pages 65-82, February.
- Agustí Segarra & Maria Callejón, 2002. "New Firms' Survival and Market Turbulence: New Evidence from Spain," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(1), pages 1-14, February.
- Audretsch, David B, 1991. "New-Firm Survival and the Technological Regime," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 441-50, August.
- Alberto Lafuente Felez & Gabriel Lecha, 1988. "Determinantes sectoriales del nacimiento de empresas en la industria española," Investigaciones Economicas, Fundación SEPI, vol. 12(2), pages 329-335, May.
- Pakes, A. & Ericson, R., 1990.
"Empirical Implications Of Alternative Models Of Firm Dynamics,"
594, Yale - Economic Growth Center.
- Pakes, Ariel & Ericson, Richard, 1998. "Empirical Implications of Alternative Models of Firm Dynamics," Journal of Economic Theory, Elsevier, vol. 79(1), pages 1-45, March.
- Ariel Pakes & Richard Ericson, 1989. "Empirical Implications of Alternative Models of Firm Dynamics," NBER Working Papers 2893, National Bureau of Economic Research, Inc.
- Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
- Becchetti, Leonardo & Trovato, Giovanni, 2002. "The Determinants of Growth for Small and Medium Sized Firms: The Role of the Availability of External Finance," Small Business Economics, Springer, vol. 19(4), pages 291-306, December.
- Richard Ericson & Ariel Pakes, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Oxford University Press, vol. 62(1), pages 53-82.
- Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-83, June.
- Audretsch, David B & Mahmood, Talat, 1995. "New Firm Survival: New Results Using a Hazard Function," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 97-103, February.
- Jovanovic, B. & MacDonald, G.M., 1992.
"The Life-Cycle of Competitive Industry,"
92-09, Rochester, Business - Financial Research and Policy Studies.
- Boyan Jovanovic & Glenn MacDonald, 1993. "The Life-Cycle of a Competitive Industry," NBER Working Papers 4441, National Bureau of Economic Research, Inc.
- Jovanovic, B. & MacDonald, G., 1993. "The Life Cycle of a Competitive Industry," Working Papers 93-34, C.V. Starr Center for Applied Economics, New York University.
- Guimaraes, Paulo & Mata, José & Portugal, Pedro, 1995.
"The Survival of New Plants: Start-up Conditions and Post-entry Evolution,"
CEPR Discussion Papers
1203, C.E.P.R. Discussion Papers.
- Mata, Jose & Portugal, Pedro & Guimaraes, Paulo, 1995. "The survival of new plants: Start-up conditions and post-entry evolution," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 459-481, December.
- Comanor, William S & Wilson, Thomas A, 1979. "The Effect of Advertising on Competition: A Survey," Journal of Economic Literature, American Economic Association, vol. 17(2), pages 453-76, June.
- Heshmati, Almas, 2000. "On the Growth of Micro and Small Firms," SSE/EFI Working Paper Series in Economics and Finance 396, Stockholm School of Economics.
- José Fariñas & Lourdes Moreno, 2000. "Firms' Growth, Size and Age: A Nonparametric Approach," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 17(3), pages 249-265, November.
- Holger G–rg & Eric Strobl, 2003.
"Multinational Companies, Technology Spillovers and Plant Survival,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 105(4), pages 581-595, December.
- Holger Görg & Eric Strobl, 2003. "Multinational Companies, Technology Spillovers, and Plant Survival," Discussion Papers of DIW Berlin 366, DIW Berlin, German Institute for Economic Research.
- Blom, Kristina & Karlsson, Charlie, 2000.
"Exit And Entry Over The Product Life Cycle: Evidence From The Swedish Manufacturing Industry,"
ERSA conference papers
ersa00p83, European Regional Science Association.
- Karlsson, Charlie & Nystrom, Kristina, 2003. "Exit and Entry over the Product Life Cycle: Evidence from the Swedish Manufacturing Industry," Small Business Economics, Springer, vol. 21(2), pages 135-44, September.
- Dolton, Peter J & van der Klaauw, Wilbert, 1995. "Leaving Teaching in the UK: A Duration Analysis," Economic Journal, Royal Economic Society, vol. 105(429), pages 431-44, March.
- Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-50, September.
- Colombo, Massimo G. & Delmastro, Marco, 2000. "A note on the relation between size, ownership status and plant's closure: sunk costs vs. strategic size liability," Economics Letters, Elsevier, vol. 69(3), pages 421-427, December.
- José Mata & Pedro Portugal, 2002.
"Patterns of Entry, Post-Entry Growth and Survival: A Comparison Between Domestic and Foreign Owned Firms,"
w200204, Banco de Portugal, Economics and Research Department.
- JosÈ Mata & Pedro Portugal, 2004. "Patterns of Entry, Post-Entry Growth and Survival: A Comparison Between Domestic and Foreign Owned Firms," Small Business Economics, Springer, vol. 22(3_4), pages 283-298, 04.
- Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-45, September.
- Audretsch, David B. & Santarelli, Enrico & Vivarelli, Marco, 1999. "Start-up size and industrial dynamics: some evidence from Italian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 17(7), pages 965-983, October.
- S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
- Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
- R. E. Caves & M. E. Porter, 1977. "From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition," The Quarterly Journal of Economics, Oxford University Press, vol. 91(2), pages 241-261.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa05p347. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)
If references are entirely missing, you can add them using this form.