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Size and survival of the hospitality industry: The case of Spain

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  • Paz Rico Belda

    (Universitat de València, Spain)

  • Bernardí Cabrer-Borrás

    (Universitat de València, Spain)

Abstract

The aim of this study is to analyse the determinants of survival of the hospitality industry. The study pays particular attention to the size of the enterprises since the majority of Spanish hospitality enterprises are microenterprises. Two approaches are considered. The first approach uses a binary choice model to analyse the determinants of survival probability as well as the Blinder–Oaxaca decomposition, proposed by Yun (2004), to quantify the difference between enterprises according to their size and what proportion of this difference is due to observed factors or unobserved factors. The second approach is a survival analysis, carried out through the Cox proportional hazard model, which identifies the determinants of the duration of business activity of a hospitality enterprise. The empirical results show that enterprises without employees encounter less favourable conditions for survival than enterprises with employees and the risk of not surviving decreases as the size of the enterprise increases.

Suggested Citation

  • Paz Rico Belda & Bernardí Cabrer-Borrás, 2021. "Size and survival of the hospitality industry: The case of Spain," Tourism Economics, , vol. 27(5), pages 933-951, August.
    • Handle: RePEc:sae:toueco:v:27:y:2021:i:5:p:933-951
    DOI: 10.1177/1354816620909997
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