, Volume 35, Issue 1, pp 1–24 | Cite as

Firm survival: methods and evidence

  • Miguel C. Manjón-AntolínEmail author
  • Josep-Maria Arauzo-Carod
Original Paper


This paper surveys the Industrial Organization literature on firm survival. We find that, in retrospect, the econometric specifications used in this area have progressively become more sophisticated, addressing issues such as discrete time, unobserved heterogeneity and competing risks. We also identify a number of firm- and industry-specific covariates that provide largely consistent results across samples, countries and periods. On the other hand, the evidence is less clear-cut with regard to ownership and spatial factors.


Duration models Industry dynamics Survival 


  1. Addison JT, Portugal P (1998) Some specification issues in unemployment duration analysis. Labour Econ 5:53–66CrossRefGoogle Scholar
  2. Agarwal R, Audretsch DB (2001) Does entry size matter? The impact of the life cycle and technology on firm survival. J Ind Econ 49:21–43CrossRefGoogle Scholar
  3. Agarwal R, Gort M (2002) Technological change. Firm and product life cycle and firm survival. Am Econ Rev 92:184–190CrossRefGoogle Scholar
  4. Agarwal R, Sarkar M, Echambadi R (2002) The conditioning effect of time on firm survival: an industry life cycle approach. Acad Manage J 45:971–994Google Scholar
  5. Allison PD (1995) Survival analysis using the SAS system: a practical guide. SAS Institute Inc., Cary, NCGoogle Scholar
  6. Andersen PK, Borgan O, Gill RD, Keiding N (1993) Statistical models based on counting processes. Springer, New YorkGoogle Scholar
  7. Audretsch DB (1991) New firm survival and the technological regime. Rev Econ Stat 73:441–450CrossRefGoogle Scholar
  8. Audretsch DB (1995) Innovation and industry evolution. The MIT Press, Cambridge, MAGoogle Scholar
  9. Audretsch DB, Mahmood T (1991) The hazard rate of new establishments: a first report. Econ Lett 36:409–412CrossRefGoogle Scholar
  10. Audretsch DB, Mahmood T (1994) The rate of hazard confronting new firms and plants in U.S. manufacturing. Rev Ind Organ 9:41–56CrossRefGoogle Scholar
  11. Audretsch DB, Mahmood T (1995) New firm survival: new results using a hazard function. Rev Econ Stat 77:97–103CrossRefGoogle Scholar
  12. Barron DN, West E, Hannan MT (1996) A time to grow and a time to die: growth and mortality of credit unions in New York City, 1914–1990. Am J Sociol 100:381–421CrossRefGoogle Scholar
  13. Brüderl J, Schussler R (1990) Organizational mortality: the liabilities of newness and adolescence. Adm Sci Q 35:530–547CrossRefGoogle Scholar
  14. Caves RE (1998) Industrial organization and new findings on the turnover and mobility of firms. J Econ Lit 36:1947–1982Google Scholar
  15. Cefis E, Marsili O (2005) A matter of life and death: innovation and firm survival. Ind Corp Change 14:1–26CrossRefGoogle Scholar
  16. Cleves MA, Gould WW, Gutierrez RG (2004) An introduction to survival analysis using Stata, Revised edn. Stata Press, College Station, TXGoogle Scholar
  17. Cox DR (1972) Regression models and life tables. J R Stat Soc (Ser B) 34:187–202Google Scholar
  18. Disney R, Haskel J, Heden Y (2003) Entry, exit and establishment survival in UK manufacturing. J Ind Econ 51:91–112CrossRefGoogle Scholar
  19. Dolton PJ, van der Klaauw W (1995) Leaving teaching in the UK: a duration analysis. Econ J 105:431–444CrossRefGoogle Scholar
  20. Ericson R, Pakes A (1995) Markov-perfect industry dynamics: a framework for empirical work. Rev Econ Stud 62:53–82CrossRefGoogle Scholar
  21. Esteve S, Mañez J (2007) The resource-based theory of the firm and firm survival. Small Business Economics, forthcomingGoogle Scholar
  22. Esteve S, Sanchis A, Sanchis JA (2004) The determinants of survival of Spanish manufacturing firms. Rev Ind Organ 25:251–273CrossRefGoogle Scholar
  23. Fichman M, Levinthal DA (1991) Honeymoons and the liability of adolescence: a new perspective on duration dependence in social and organizational relationships. Acad Manage Rev 16:442–468CrossRefGoogle Scholar
  24. Fotopoulos G, Louri H (2000) Location and survival of new entry. Small Bus Econ 14:311–321CrossRefGoogle Scholar
  25. Freeman J, Carroll G, Hannan M (1983) The liability of newness: age dependence in organizational death rates. Am Sociol Rev 48:692–710CrossRefGoogle Scholar
  26. Fritsch M, Brixy U, Falck O (2006) The effect of industry, region, and time on new business survival––a multi-dimensional analysis. Rev Ind Organ 28:285–306CrossRefGoogle Scholar
  27. Fujita M, Krugman P, Venables AJ (1999) The spatial economy. MIT Press, CambridgeGoogle Scholar
  28. Geroski PA (1995) What do we know about entry? Int J Ind Organ 13:421–440CrossRefGoogle Scholar
  29. Görg H, Strobl E (2003) Footlose multinationals? Manchester Sch 71:1–19CrossRefGoogle Scholar
  30. Han A, Hausman JA (1990) Flexible parametric estimation of duration and competing risk models. J Appl Econom 5:1–28CrossRefGoogle Scholar
  31. Hannan MT (2005) Ecologies of organizations: diversity and identity. J Econ Perspect 19:51–70CrossRefGoogle Scholar
  32. Hannan MT, Carrol GR, Dobrev SD, Han J (1998) Organizational mortality in European and American automobile industries. Part I: revisiting the effects of age and size. Eur Sociol Rev 14:279–302Google Scholar
  33. Harhoff D, Stahl K, Woywode M (1998) Legal form, growth and exit of West German firms. J Ind Econ 46:453–488CrossRefGoogle Scholar
  34. Heckman JJ, Singer B (1984) A method for minimising the impact of distributional assumptions in econometric models for duration data. Econometrica 52:271–320CrossRefGoogle Scholar
  35. Honjo Y (2000) Business failure of new firms: an empirical analysis using a multiplicative hazards model. Int J Ind Organ 18:557–574CrossRefGoogle Scholar
  36. Hougaard P (2000) Analysis of multivariate survival data. Springer, New YorkGoogle Scholar
  37. Hutton JL, Monaghan PF (2002) Choice of parametric accelerated life and proportional hazard models for survival data: asymptotic results. Lifetime Data Anal 8:375–393CrossRefGoogle Scholar
  38. Jenkins SP (2005) Survival analysis. Institute for Social and Economic Research, University of Essex (Unpublished manuscript)Google Scholar
  39. Jofre J (2007) Agglomeration economies and firm survival. In: Arauzo JM, Manjón MC (eds) Entrepreneurship, industrial location and economic growth. Edward Elgar, Cheltenham, forthcomingGoogle Scholar
  40. Jovanovic B (1982) Selection and evolution of industry. Econometrica 50:649–670CrossRefGoogle Scholar
  41. Kiefer NM (1988) Economic duration data and hazard functions. J Econ Lit 26: 646–679Google Scholar
  42. Kimura F, Fujii T (2003) Globalizing activities and the rate of survival: panel data analysis on Japanese firms. J Jpn Int Econ 17:538–560CrossRefGoogle Scholar
  43. Lancaster T (1972) A stochastic model for the duration of a strike. J R Stat Soc (Ser A, General) 135:257–271CrossRefGoogle Scholar
  44. Lancaster T (1990) The econometric analysis of transition data. Cambridge University Press, CambridgeGoogle Scholar
  45. Linton OB, Nielsen JP, van de Geer S (2003) Estimating multiplicative and additive hazard functions by Kernel methods. Ann Stat 31:464–492CrossRefGoogle Scholar
  46. López-García P, Puente S (2007) A comparison of the determinants of survival of Spanish firms across economic sectors. In: Arauzo JM, Manjón MC (eds) Entrepreneurship, industrial location and economic growth. Edward Elgar, Cheltenham, forthcomingGoogle Scholar
  47. Mata J, Portugal P (1994) Life duration of new firms. J Ind Econ 42:227–246CrossRefGoogle Scholar
  48. Mata J, Portugal P (2000) Closure and divestiture by foreign entrants: the impact of entry and post-entry strategies. Strateg Manage J 21:549–562CrossRefGoogle Scholar
  49. Mata J, Portugal P (2002) The survival of new domestic and foreign owned firms. Strateg Manage J 23:323–343CrossRefGoogle Scholar
  50. Mata J, Portugal P, Guimarães P (1995) The survival of new plants: start-up conditions and post-entry evolution. Int J Ind Organ 13:459–482CrossRefGoogle Scholar
  51. Mahmood T (2000) Survival of newly founded businesses: a log-logistic model approach. Small Bus Econ 14:223–237CrossRefGoogle Scholar
  52. Manton KG, Stallard E, Vaupel JW (1986) Alternative models for the heterogeneity of mortality risks among the aged. J Am Stat Assoc 81:635–644CrossRefGoogle Scholar
  53. Narendranathan W, Stewart MB (1993) Modelling the probability of leaving unemployment: competing risks models with flexible base-line hazards. Appl Stat 42:63–83CrossRefGoogle Scholar
  54. Neumann GR (1997) Search models and duration data. In: Pesaran MH (ed) Handbook of applied econometrics: microeconometrics. Basil Blackwell, Oxford, pp 300–351Google Scholar
  55. Orbe J, Ferreira E, Nuñez-Antón V (2002) Comparing proportional hazards and accelerated failure time models for survival analysis. Stat Med 21:3493–3510CrossRefGoogle Scholar
  56. Ortega-Argilés R, Moreno R (2007) The survival chances of competitive businesses. In: Arauzo JM, Manjón MC (eds) Entrepreneurship, industrial location and economic growth. Edward Elgar, Cheltenham, forthcomingGoogle Scholar
  57. Pakes A, Ericson R (1998) Empirical implications of alternative models of firm dynamics. J Econ Theory 79:1–45CrossRefGoogle Scholar
  58. Segarra A, Callejón M (2002) New firms’ survival and market turbulence: new evidence from Spain. Rev Ind Organ 20:1–14CrossRefGoogle Scholar
  59. Stinchcombe F (1965) Social structure and organizations. In: March JG (ed) Handbook of organizations. Rand McNally, Chicago, pp 142–193Google Scholar
  60. Strotmann H (2007) Entrepreneurial survival. Small Bus Econ 28:87–104CrossRefGoogle Scholar
  61. Thompson P (2005) Selection and firm survival: evidence from the shipbuilding industry, 1825–1914. Rev Econ Stat 87:26–36CrossRefGoogle Scholar
  62. Tveterås R, Eide GE (2000) Survival of new plants in different industry environments in Norwegian manufacturing: a semi-proportional Cox model approach. Small Bus Econ 14:65–82CrossRefGoogle Scholar
  63. van den Berg G (2001) Duration models: specification, identification and multiple durations. In: Heckman JJ, Leamer E (eds) Handbook of econometrics, vol 5. Elsevier, North-Holland, Amsterdam, pp 3381–3460Google Scholar
  64. Wheelock DC, Wilson PW (2000) Why do banks disappear? The determinants of U.S. bank failures and acquisitions. Rev Econ Stat 82:127–138CrossRefGoogle Scholar
  65. Winter S (1984) Schumpeterian competition in alternative technological regimes. J Econ Behav Organ 5:287–320CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC. 2007

Authors and Affiliations

  • Miguel C. Manjón-Antolín
    • 1
    Email author
  • Josep-Maria Arauzo-Carod
    • 1
  1. 1.QURE – Department of EconomicsRovira i Virgili UniversityReusSpain

Personalised recommendations