Review of Industrial Organization

, Volume 9, Issue 1, pp 41–56 | Cite as

The rate of hazard confronting new firms and plants in U.S. manufacturing

  • David B. Audretsch
  • Talat Mahmood


Three different factors are hypothesized to shape the hazard function confronting new businesses — the extent of scale economies relative to start-up size, the technological environment, and ownership structure. Using a longitudinal data base tracking the post-entry performance of more than 12,000 U.S. manufacturing establishments, a semi-parametric Cox regression model is used to estimate the hazard function. The evidence suggests that while the presence of high scale economies, a high-technological environment, and a relatively small initial start-up size tend to elevate the exposure of risk confronting new businesses, these factors apparently exert no influence on the likelihood of survival for new branches and subsidiaries established by existing enterprises.

Key words

Entry innovation survival new firms hazard exit 


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Copyright information

© Kluwer Academic Publishers 1994

Authors and Affiliations

  • David B. Audretsch
    • 1
  • Talat Mahmood
    • 1
  1. 1.CEPR and Wissenschaftszentrum Berlin für SozialforschungBerlinGermany

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