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Probability of Survival of New Manufacturing Plants: the case of Chile

Jose Miguel Benavente and Christian Ferrada

No 305, Econometric Society 2004 Latin American Meetings from Econometric Society

Abstract: This paper studies the probability of survival of the manufacturing plants that start producing in Chile in the period 1979-1999 using a proportional hazards model. Opposing previous empirical international evidence, the survival diminishes with age, initial size, and with the rate of growth of the plant. It also diminishes with the regional unemployment rate. Comparing companies by size, the rate of risk of death of small and medium businesses is 20.3% greater than large companies, but more interesting, this rate is unaffected by the public subsidies received by the smaller ones, after controlling simultaneously with other explanatory variables. Using four different samples from the same data, the consequences of applying different criteria that validate and/or eliminate inconsistent data are studied, obtaining significant differences in the resulting coefficients

Keywords: Chilean manufacturing; Entry; Survival; Duration (search for similar items in EconPapers)
JEL-codes: L11 L60 (search for similar items in EconPapers)
Date: 2004-08-11
New Economics Papers: this item is included in nep-ent
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