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Probability of Survival of New Manufacturing Plants: the case of Chile

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  • José Miguel Benavente
  • Christian Ferrada

Abstract

This paper studies the probability of survival of the manufacturing plants that start producing in Chile in the period 1979-1999 using a proportional hazards model. Opposing previous empirical international evidence, the survival diminishes with age, initial size, and with the rate of growth of the plant. It also diminishes with the regional unemployment rate. Comparing companies by size, the rate of risk of death of small and medium businesses is 20.3% greater than large companies, but more interesting, this rate is unaffected by the public subsidies received by the smaller ones, after controlling simultaneously with other explanatory variables. Using four different samples from the same data, the consequences of applying different criteria that validate and/or eliminate inconsistent data are studied, obtaining significant differences in the resulting coefficients

Suggested Citation

  • José Miguel Benavente & Christian Ferrada, 2004. "Probability of Survival of New Manufacturing Plants: the case of Chile," Econometric Society 2004 Latin American Meetings 305, Econometric Society.
    • Handle: RePEc:ecm:latm04:305
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    File URL: http://repec.org/esLATM04/up.10751.1082126611.pdf
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    References listed on IDEAS

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    Cited by:

    1. Alvarez, Roberto & Görg, Holger, 2009. "Multinationals and plant exit: Evidence from Chile," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 45-51, January.
    2. Tommaso Ciarli & Alex Coad & Alessio Moneta, 2019. "Exporting and productivity as part of the growth process: Causal evidence from a data-driven structural VAR," LEM Papers Series 2019/39, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Roberto Alvarez & Sebastián Vergara, 2010. "Exit in Developing Countries: Economic Reforms and Plant Heterogeneity," Economic Development and Cultural Change, University of Chicago Press, vol. 58(3), pages 537-561, April.
    4. Roberto Alvarez & Ricardo A. López, 2008. "Entry and Exit in International Markets: Evidence from Chilean Data," Review of International Economics, Wiley Blackwell, vol. 16(4), pages 692-708, September.
    5. Ciarli, Tommaso & Coad, Alex & Moneta, Alessio, 2023. "Does exporting cause productivity growth? Evidence from Chilean firms," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 228-239.

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    More about this item

    Keywords

    Chilean manufacturing; Entry; Survival; Duration;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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