IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/68600.html
   My bibliography  Save this paper

The New Approach to Estimation of the Hazard Function in Business Demography on Example of Data from New Zealand

Author

Listed:
  • Zając, Paweł

Abstract

The author presents the new methodology for the estimation of the hazard function for the new born enterprises’ survival rate called FIRM. The methodology is based on construction of a stochastic process and is examined in the Monte Carlo simulation study with real data. The dataset is provided by Statistics New Zealand and contains all enterprises born in period between 2001–2010. Enterprises are divided in clusters according to the number of employees and for each cluster individual simulations are made. Achieved coefficients of determination in clusters are around 90%. The author finds substantial differences in survival probability according to employee count size in the company. Simulations done in this study allow to estimate mean and standard deviation of life duration for enterprises and prediction of the hazard function for each cluster.

Suggested Citation

  • Zając, Paweł, 2013. "The New Approach to Estimation of the Hazard Function in Business Demography on Example of Data from New Zealand," MPRA Paper 68600, University Library of Munich, Germany, revised 2013.
    • Handle: RePEc:pra:mprapa:68600
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/68600/1/MPRA_paper_68600.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paolo Angelini & Andrea Generale, 2008. "On the Evolution of Firm Size Distributions," American Economic Review, American Economic Association, vol. 98(1), pages 426-438, March.
    2. Wagner, Joachim, 1994. "The Post-entry Performance of New Small Firms in German Manufacturing Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 141-154, June.
    3. Jovanovic, Boyan & MacDonald, Glenn M, 1994. "The Life Cycle of a Competitive Industry," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 322-347, April.
    4. Alcina Nunes & Elsa Sarmento, 2010. "Business Demography Dynamics In Portugal: A Non-Parametric Survival Analysis," GEE Papers 0022, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Sep 2010.
    5. Alcina Nunes & Elsa Sarmento, 2010. "Business Demography Dynamics in Portugal: a Semi-parametric Survival Analysis," GEE Papers 0023, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Sep 2010.
    6. Rajshree Agarwal & David B. Audretsch, 2001. "Does Entry Size Matter? The Impact of the Life Cycle and Technology on Firm Survival," Journal of Industrial Economics, Wiley Blackwell, vol. 49(1), pages 21-43, March.
    7. Zoltan J. Acs & Catherine Armington, 2008. "The Impact of Geographic Differences in Human Capital on Service Firm Formation Rates," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 19, pages 244-278, Edward Elgar Publishing.
    8. Pei-Chou Lin & Deng-Shing Huang, 2008. "Technological Regimes and Firm Survival: Evidence Across Sectors and Over Time," Small Business Economics, Springer, vol. 30(2), pages 175-186, February.
    9. C. Mirjam van Praag, 2003. "Business Survival and Success of Young Small Business Owners," Tinbergen Institute Discussion Papers 03-050/3, Tinbergen Institute.
    10. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
    11. Mata, Jose & Portugal, Pedro & Guimaraes, Paulo, 1995. "The survival of new plants: Start-up conditions and post-entry evolution," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 459-481, December.
    12. Thomas Astebro & Irwin Bernhardt, 1999. "The Winner's Curse of Human Capital," Working Papers 99-5, Center for Economic Studies, U.S. Census Bureau.
    13. Audretsch, David B & Mahmood, Talat, 1995. "New Firm Survival: New Results Using a Hazard Function," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 97-103, February.
    14. Thomas Åstbro & Irwin Bernhardt, 2005. "The Winner’s Curse of Human Capital," Small Business Economics, Springer, vol. 24(1), pages 63-78, February.
    15. Paloma López-García & Sergio Puente, 2006. "Business demography in Spain: determinants of firm survival," Working Papers 0608, Banco de España.
    16. Richard E. Caves, 1998. "Industrial Organization and New Findings on the Turnover and Mobility of Firms," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1947-1982, December.
    17. Acs,Zoltan J. & Audretsch,David B. (ed.), 1993. "Small Firms and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521431156, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Henryk Gurgul & Roland Mestel & Robert Syrek, 2013. "The testing of causal stock returns-trading volume dependencies with the aid of copulas," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 21-44.
    2. Henryk Gurgul & Marcin Suder, 2013. "Modeling of withdrawals from selected ATMs of the "Euronet" network," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 65-82.
    3. Pawel Zajac, 2013. "The New Approach to estimation of the Hazard Function in Business Demography on example of Data from New Zealand," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 99-110.
    4. Henryk Gurgul & Machno Artur & Roland Mestel, 2013. "Modeling of returns and trading volume by regime switching copulas," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 45-64.
    5. K. Liczmanska & A.M. Wisniewska, 2013. "A strong brand as a determinant of purchase the case of sectors, where advertising in mass media is banned – on the example of the Polish spirits sector," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 83-98.
    6. Joanna Duda, 2013. "The Role of Bank Credits in Investment Financing of the Small and Medium-sized Enterprise Sector in Poland," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 13, pages 7-20.
    7. Masatoshi Kato & Yuji Honjo, 2015. "Entrepreneurial human capital and the survival of new firms in high- and low-tech sectors," Journal of Evolutionary Economics, Springer, vol. 25(5), pages 925-957, November.
    8. Colombo, Massimo G. & Delmastro, Marco & Grilli, Luca, 2004. "Entrepreneurs' human capital and the start-up size of new technology-based firms," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1183-1211, November.
    9. Michael Fritsch & Florian Noseleit & Yvonne Schindele, 2014. "Surviving Against the Tide: Are New Businesses in Innovative Industries Less Affected by General Economic Trends?," Jena Economics Research Papers 2014-017, Friedrich-Schiller-University Jena.
    10. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna, 2016. "Inverted-U relationship between R&D intensity and survival: Evidence on scale and complementarity effects in UK data," Research Policy, Elsevier, vol. 45(7), pages 1474-1492.
    11. Dimara, Efthalia & Skuras, Dimitris & Tsekouras, Kostas & Tzelepis, Dimitris, 2008. "Productive efficiency and firm exit in the food sector," Food Policy, Elsevier, vol. 33(2), pages 185-196, April.
    12. Harada, Nobuyuki, 2003. "Who succeeds as an entrepreneur? An analysis of the post-entry performance of new firms in Japan," Japan and the World Economy, Elsevier, vol. 15(2), pages 211-222, April.
    13. Cefis, Elena & Marsili, Orietta, 2006. "Survivor: The role of innovation in firms' survival," Research Policy, Elsevier, vol. 35(5), pages 626-641, June.
    14. Raquel Ortega-Argilés & Rosina Moreno, 2005. "Firm Competitive Strategies And The Likelihood Of Survival - The Spanish Case," ERSA conference papers ersa05p347, European Regional Science Association.
    15. Christos Genakos & Ioannis Kaplanis & Maria Theano Tagaraki & Aggelos Tsakanikas, 2023. "Firm Resilience and Growth during the Economics Crisis: lessons from the Greek depression," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 186, Hellenic Observatory, LSE.
    16. Elena Cefis & Orietta Marsili, 2005. "A matter of life and death: innovation and firm survival," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 14(6), pages 1167-1192, December.
    17. Colombelli, Alessandra & Krafft, Jackie & Vivarelli, Marco, 2016. "New Firms and Post-Entry Performance: The Role of Innovation," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201602, University of Turin.
    18. Jean-Pierre Huiban, 2011. "The spatial demography of new plants: urban creation and rural survival," Small Business Economics, Springer, vol. 37(1), pages 73-86, July.
    19. Alessandra Colombelli & Jackie Krafft & Marco Vivarelli, 2016. "Entrepreneurship and Innovation: New Entries, Survival, Growth," GREDEG Working Papers 2016-04, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    20. Alex Coad & Julian Frankish & Paul Nightingale & Richard Roberts, 2014. "Business experience and start-up size: Buying more lottery tickets next time around?," Small Business Economics, Springer, vol. 43(3), pages 529-547, October.

    More about this item

    Keywords

    business demography; birth and death of enterprise; hazard function; Monte Carlo simulation; prediction;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • H00 - Public Economics - - General - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:68600. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.