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Age and productivity as determinants of firm survival over the product life cycle

Author

Listed:
  • Silviano Esteve Pérez

    (Department of Applied Economics II, Universitat de València)

  • Fabio Pieri

    (Department of Applied Economics, Universitat de València)

  • Diego Rodriguez

    (Department of Applied Economics II, Universidad Complutense de Madrid)

Abstract

This paper contributes to fill the gap between the literature on the determinants of firm survival and the theoretical and empirical works on the product life cycle (PLC). Using a representative sample of Spanish manufacturing firms with ten or more employees over the period 1991-2010, we empirically analyze the role played by firm age and productivity on firm survival across three different phases of the PLC to which firms are allocated according to firm- and product-level haracteristics. Firm age results to be negatively and significantly correlated with hazard rates mostly in the ‘young’ phase of the PLC, pointing out the role of ‘learning processes’ in this phase, while firm productivity is associated with lower hazard rates only in the ‘old’ phase of the PLC when market competition is primarily efficiency-driven. Our results qualify the roles of age and productivity as determinants of firm survival.

Suggested Citation

  • Silviano Esteve Pérez & Fabio Pieri & Diego Rodriguez, 2015. "Age and productivity as determinants of firm survival over the product life cycle," Working Papers 1502, Department of Applied Economics II, Universidad de Valencia.
    • Handle: RePEc:eec:wpaper:1502
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    References listed on IDEAS

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    Cited by:

    1. Giovanni Dosi & Emanuele Pugliese & Pietro Santoleri, 2017. "Growth and survival of the `fitter'? Evidence from US new-born firms," LEM Papers Series 2017/06, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

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    More about this item

    Keywords

    Product life cycle; firm survival; Spanish manufacturing firms; discrete time survival methods;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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