Establishment exits in Germany: the role of size and age

Schnabel C, Fackler D, Wagner J (2013)

Publication Language: English

Publication Type: Journal article

Publication year: 2013

Journal

Small Business Economics Springer Verlag (Germany)

Publisher: Springer Verlag (Germany)

Book Volume: 41

Pages Range: 683-700

Journal Issue: 3

DOI: 10.1007/s11187-012-9450-z

Abstract

Using comprehensive data for West Germany, this paper investigates the determinants of establishment exit. We find that between 1975 and 2006 the average exit rate has risen considerably. In order to test various 'liabilities' of establishment survival identified in the literature, we analyzed the impact of establishment size and put a special focus on differences between young and mature establishments. Our empirical analysis shows that the mortality risk falls with establishment size, which confirms the liability of smallness. The probability of exit is substantially higher for young establishments which are not more than 5 years old, thus confirming the liability of newness. There also exists a liability of aging since exit rates first decline over time, reaching a minimum at ages 15-18, and then rise again somewhat. The determinants of exit differ substantially between young and mature establishments, suggesting that young establishments are more vulnerable in a number of ways.

Authors with CRIS profile

Claus Schnabel Lehrstuhl für Volkswirtschaftslehre, insbesondere Arbeitsmarkt- und Regionalpolitik Daniel Fackler Lehrstuhl für Volkswirtschaftslehre, insbesondere Arbeitsmarkt- und Regionalpolitik

Related research project(s)

Betriebsschließungen in Deutschland: Umfang, Verlauf und Einflussfaktoren Feb. 1, 2011 - March 30, 2013

Involved external institutions

Leuphana Universität Lüneburg DE Germany (DE)

How to cite

APA:

Schnabel, C., Fackler, D., & Wagner, J. (2013). Establishment exits in Germany: the role of size and age. Small Business Economics, 41(3), 683-700. https://dx.doi.org/10.1007/s11187-012-9450-z

MLA:

Schnabel, Claus, Daniel Fackler, and Joachim Wagner. "Establishment exits in Germany: the role of size and age." Small Business Economics 41.3 (2013): 683-700.

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