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Entry and exit dynamics in the Austrian manufacturing industries

Hölzl, Werner and Soegner, Leopold (2004) Entry and exit dynamics in the Austrian manufacturing industries. Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness", 36. Inst. für Volkswirtschaftstheorie und -politik, WU Vienna University of Economics and Business, Vienna.

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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 determinants 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 entry rates and a low turnover. (author's abstract)

Item Type: Paper
Keywords: Entry / Exit / Industry Turbulence / MCMC
Classification Codes: JEL C2, J2, M13
Divisions: Departments > Volkswirtschaft
Depositing User: Repository Administrator
Date Deposited: 01 Jul 2004 11:28
Last Modified: 03 Mar 2015 18:42
URI: http://epub.wu.ac.at/id/eprint/406

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