Louri, Helen and Peppas, Costas and Tsionas, Efthymios (2006): Foreign presence, technical efficiency and firm survival in Greece: a simultaneous equation model with latent variables approach. Published in: Entrepreneurship, Growth, and Innovation: the Dynamics of Firms and Industries, E. Santarelli (ed), Springer Verlag Berlin (2006): pp. 199-221.
Download (625Kb) | Preview
The aim of the paper is to explain the role that technical efficiency and foreign spillover effects have on firm survival. Panel data from Greek manufacturing industry (3142 firms) in 1997-2003 are used. Technical efficiency is estimated through a CES translog production function. A hazard function is then used (corresponding to the Exponential and Weibull distributions as well as the Cox model) to estimate survival probabilities. While foreign spillovers exercise a positive impact on hazard, foreign firms do not have any distinctive survival advantage compared to their domestic rivals. On the contrary, technical efficiency affects hazard in a negative way, improving survival expectations.
|Item Type:||MPRA Paper|
|Original Title:||Foreign presence, technical efficiency and firm survival in Greece: a simultaneous equation model with latent variables approach|
|Keywords:||foreign firms; technical efficiency; firm survival|
|Subjects:||L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification, and Scope
F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
|Depositing User:||Helen Louri|
|Date Deposited:||04. Apr 2011 06:16|
|Last Modified:||21. Feb 2013 08:39|
Aganval, R. (1997), "Survival of Firm Over the Product Lire Cycle", Southern Economic Journal, 63(4), 571-584.
Agarwal, R. and IM. Gort (1996): "The Evolution of Markets and Entry, Exit and Survival of Firms", Review of Economics and Statistics, 78(4), 489-498.
Aigner. D. J.; C .A. K. Love11 and P. Schmidt (1977), Formulation and Estimation of Stochastic Frontier Production Function Models", Journal of Econometrics, 6(1), 21-37.
Aitken J. B. and E. A. Harrison (1999), "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela", American Economic Review, 89(3), 605-618.
Audretsch D. B. (1991); "New-firm Survival and the Technological Regime", Review of Economics and Statistics, 73(3), 441-450.
Audretsch. D. B. (1994), "Business Survival and the Decision to Exit", Journal of the Economics of Business; 1(1), 125-137.
Audretsch, D. B. (1995), "Innovation, Growth and Survival", International Journal of Industrial Organization, 13(4), 441-457.
Audretsch, D. B.; P. Houweling and A. R. Thurik (2000), "Firm Survival in the Netherlands", Review of Industrial Organization, 16(1), 1 - 11.
Audretsch, D. B. and T. Mahmood (1994), "The Rate of Hazard Confronting New Firms and Plants in U.S. Manufacturing", Review of Industrial Organization, 9(1), 41-56.
Audretsch, D. B. and T. Mahmood (1995), "New Firm Survival: New Results Using a Hazard Function", Review of Economics and Statistics, 77(1), 97- 103.
Baden-Fuller, C. W. F. (1989), "Exit from Declining Industries and the Case of Steel Castings", Economic Journal, 99(398), 949-961.
Bauer, P. W. (1990), "Recent Developments in the Econometric Estimation of Frontiers", Journal of Econometrics, 46(1-2), 39-56.
Bernard B. A. and J. B. Jensen (2002), "The Deaths of Manufacturing Plants", National Bureau of Economic Research, Working Paper No. 9026.
Bernard B. A. and F. Sjoholm (2003), "Foreign Owners and Plant Survival", National Bureau of Economic Research, Working Paper No. 10039.
Blomstrom M. (1986), "Foreign Investment and Productive Efficiency: the Case of Mexico", Journal of Industrial Economics, 35(1), 95- 112.
Blomstrom M. and A. Kokko (1998), "Multinational Corporations and Spillovers", Journal of Economic Surveys, 12(2), 1-31.
Blomstrom M, and F. Sjoholm (1999), "Technology Transfer and Spillovers: Does Local Participation with Multinationals Matter?", European Economic Review, 43(4-6), 915-923.
Caves R. E. (1974), "Multinational Firms, Competition and Productivity in Host-country Markets", Economica, 41(162), 176- 193.
Deily, E. M. (1991), "Exit Strategies and Plant-closing Decisions: The Case of Steel", Rand Journal of Economics, 22(2), 250-263.
Dimara, E., D. Skuras, K. Tsekouras and D. Tzelepis (2003). "Firm Efficiency and Survival", paper presented at the 2" Hellenic Workshop on Productivity and Efficiency Measurement, University of Patras, Greece.
Dimelis, S. and H. Louri (2002), "Foreign Ownership and Production Efficiency: A Quantile Regression Analysis", Oxford Economic Papers, 54(3), 449-469.
Dimelis, S, and H. Louri (2004), "Foreign Direct Investment and Technology Spillovers: Which Firms Really Benefit?", Weltwirtschaftliches Archiv , 140(2), 230-253.
Doms, M., T. Dunne and J. M. Roberts (1995), "The Role of Technology Use in the Survival and Growth of Manufacturing Plants", International Journal of Industrial Organization,13(4), 523-542.
Dunne, P. and A. Hughes (1994), "Age, Size, Growth and Survival: UK Companies in the 1980s", Journal of Industrial Economics, 42(2), 115- 140.
Dunne, T., .I. M. Roberts and L. Samuelson (1988), "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries, Rand Journal of Economics, 19(4), 495-515.
Fotopoulos, G. and H. Louri (2000), "Location and Survival of New Entry", Small Business Economics, I4(4), 311-321.
Geroski, P. A. (1995), "What Do We Know about Entry?", Internationa1 Journal of Industrial Organization, 13(4), 421-440.
Ghemawat, P. and B. Nalebuff (1985), "Exit", RAND Journal of Economics l6(2), 184- 194.
Globerman, S. (1979), "Foreign Direct Investment and Spillover Efficiency Benefits in Canadian Manufacturing Industries", Canadian Journal of Economics, 12(1), 42-56.
Gorg, H. and E. Strobl (2003), "Multinational Companies, Technology Spillovers and Plant Survival", Scandinavian Journal of Economics, 105(4), 581-595.
Greene, W. H. (1993), "The Econometric Approach to Efficiency Analysis", in H. O. Fried, C. A. K. Lovell and S. S. Schmidt (eds.), The measurement of productive efficiency: Techniques and Applications, Oxford, Oxford University Press, 68-119.
Greene, W. H. (2000), Econometric Analysis, New York, Prentice Hall.
Greene, W. H. (2001), "New Developments in the Estimation of Stochastic Frontier Models with Panel Data", Department of Economics, Stem School of Business, New York University.
Greene, W. H. (2004), "Distinguishing Between Heterogeneity and Inefficiency: Stochastic Frontier Analysis of the World Health Organization's Panel Data on National Health Care Systems", Journal of Health Economics, 13(10), 959-980.
Haddad, M. and E. A. Harrison (1993), "Are There Positive Spillovers from Direct Foreign Investment? Evidence from Panel Data for Morocco", Journal of Development Economics, 42, 51-74.
Jondrow, J., C. A. K. Lovell, I. S. Materov and P. Schmidt (1982), "On the Estimation of Technical Inefficiency in the Stochastic Frontier Production Function Model", Journal of Econometrics, 19, 233-38.
Kalbfleisch, J. D. and R. L. Prentice (1980), The Statistical Analysis of Failure Time Data, New York, Wiley.
Kumbhakar, S. C. and C. A. K Lovell (2000), Stochastic Frontier Analysis, Cambridge and New York, Cambridge University Press.
Kumbhakar, S. C. and E. G. Tsionas (2005a), "Measuring Technical and Allocative Inefficiency in the Translog Cost System: a Bayesian Approach", Journal of Econometrics, 126(2), 355-384.
Kumbhakar, S. C. and E. G. Tsionas (2005b), "The Joint Measurement of Technical and Allocative Inefficiency: An Application of Bayesian Inference in Nonlinear Random Effects Models", Journal of the American Statistical Association, 100(471),736-747.
Kumbhakar, S. C. and E. G. Tsionas (2006), "Estimation of Stochastic Frontier Production Functions with Input-Oriented Technical Efficiency", Journal of Econometrics, 2005, l26(2), 355-384.
Mahmood, T. (1992), "Does the Hazard Rate of New Plants Vary between High- and low-tech Industries?", Small Business Economics, 4(3), 201-210. Mahmood, T. (2000), "Survival of Newly Founded Businesses: A Log-logistic Model Approach", Small Business Economics, 14(3), 223-237.
Mata J., P. Portugal and P. Guimaraes (1995), "The Survival of New Plants: Start-up Conditions and Post-entry Evolution", International Journal of Industrial Organization, 13(4), 459-481.
Meeusen, W. and J, van den Broeck (1977), "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error", International Economic Review, 18(2), 435-444.
Reynolds, S. S. (1988), "Plant Closings and Exit Behavior in Declining Industries", Economica, New Series, 55(220), 493-503.
Santarelli, E., (1998), ''Start-up Size and Post-entry Performance: The Case of Tourism Services in Italy", Applied Economics, 30(2), 157-163.
Santarelli, E. (2000), "The Duration of New Firms in Banking: An Application of Cox Regression Analysis", Empirical Economics, 25(2), 315-325.
Tsionas, E. G. (1999), "Full Likelihood Inference in Normal-gamma Stochastic Frontier Models", Journal of Productivity Analysis, 13(2), 179-201.
Tsionas, E. G. (2002); "Stochastic Frontier Models with Random Coefficients", Journal of Applied Econometrics, 17(2), 121-147.
Wheelock, D. C. and P. W. Wilson (1995), "Explaining Bank Failures: Deposit Insurance, Regulation, and Efficiency", Review of Economics and Statistics, 77(4), 689-700.
Whinston, D. M. (1988), "Exit with Multiplant Firms", The Rand Journal of Economics, 19(4), 568-588.