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New Firm Survival: Industry versus Firm Effects

David Audretsch (), Patrick Houweling and Roy Thurik ()

No 97-063/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Recent studies show that the likelihood of survival differs significantly across firms. Both firm and industry characteristics are hypothesized to account for this heterogenity. Using a longitudinal database of manufacturing firms we investigate whether firm or industry characteristics dominate. Our evidence suggests that both firm- and industry-specific characteristics shape new-firm survival during the first years subsequent to entry. However, in the longer run, most of the industry factors have little influence on the likelihood of survival, but firm-specific characteristics still exert a considerable influence in shaping firm survival rates.

Date: 1997-06-13
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