Productivity and Market Selection of French Manufacturing Firms in the Nineties

Flora Bellone (), Patrick Musso (), Lionel Nesta and Michel Quéré
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Michel Quéré: GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper analyses post-entry and pre-exit performance of French firms using a dataset covering 14 manufacturing industries over the period 1990-2002. The main focus is on market selection mechanisms looking at total factor productivity levels of entrants and exitors relative to incumbent firms. Entrants are found to outperform incumbents, while exitors are less efficient than their surviving counterparts. We nonetheless found key distinguishable features of exit patterns between young and mature firms. Young exiting firms do not display productivity disadvantage relative to incumbent firms. By contrast, mature exiting firms display large and persistent productivity disadvantage relative to their surviving counterparts (shadow of death effect). The determinants of exit differ for entrants and incumbents. Productive inefficiency is a key determinant of the exit of mature firms but not entrants.

Keywords: entry and exit patterns; firm level data; TFP indexes; market selection (search for similar items in EconPapers)
Date: 2006-02
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-00973057
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Citations: View citations in EconPapers (40)

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Related works:
Journal Article: Productivity and Market Selection of French Manufacturing Firms in the Nineties (2006)
Working Paper: Productivity and Market Selection of French Manufacturing Firms in the Nineties (2006)
Working Paper: Productivity and market selection of french manufacturing firms in the nineties (2006)
Working Paper: Productivity and Market Selection of French Manufacturing Firms in the Nineties (2006)
Working Paper: Productivity and market selection of french manufacturing firms in the nineties (2006)
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