The Shadow of Death: Analysing the Pre-Exit Productivity of Portuguese Manufacturing Firms

Carlos Carreira () and Paulino Teixeira

No 2008-05, GEMF Working Papers from GEMF, Faculty of Economics, University of Coimbra

Abstract: In this study, we examine the pre-exiting productivity profile of mature firms relatively to survivors. We also evaluate how productivity affects the probability of exit along various dimensions. Our approach is an empirical one, and it is based on an unbalanced panel of Portuguese manufacturing firms covering a period of one decade. Our findings confirm that market selection forces low-productivity firms to exit, but there is also evidence that a sizeable portion of low-productivity firms do not shut down. Conversely, there is a non-negligible fraction of high-productivity firms that do actually close. In line, too, with some key theoretical predictions, exiting firms reveal a falling productivity level over a number of years prior to exit. Finally, our results from the survival model show that both low-productivity and small firms are much more likely to exit the market. Industry and macro environment were also found to have a non-negligible role on the exit of mature firms.

Keywords: Pre-exit performance; Exit pattern; Productivity; Firm survival; Portugal (search for similar items in EconPapers)
JEL-codes: D21 D24 L25 L60 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2008-07
New Economics Papers: this item is included in nep-bec, nep-eff and nep-ent
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Published in Small Business Economics 36(3): 337-351, 2011

Downloads: (external link)
https://repec.uc.pt/gmf/wpaper/wpgemf/gemf_2008-05.pdf (application/pdf)

Related works:
Journal Article: The shadow of death: analysing the pre-exit productivity of Portuguese manufacturing firms (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gmf:wpaper:2008-05

Access Statistics for this paper

More papers in GEMF Working Papers from GEMF, Faculty of Economics, University of Coimbra Contact information at EDIRC.
Bibliographic data for series maintained by Sofia Antunes ().