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Author: | Peneder, M.P. |
Title: | Firm entry and turnover: the nexus with profitability and growth |
Journal: | Small business economics
2008 : APR/MAY, VOL. 30:4, p. 327-344 |
Index terms: | industries life cycles profitability growth market entry companies demography econometric models |
Language: | eng |
Abstract: | This paper presents a new sectoral taxonomy classifying industries according to the opportunity and cost of experimentation. Econometric tests show for a sample of 24 countries that in the 1990s 'entrepreneurial' industries (here as: inds.) with a mutable and growing firm population experienced the highest growth in terms of value added and employment, but also the lowest growth of labour productivity. 'Entrepreneurial' inds. earned a better profit-ratio than 'routinized' inds. with an inertial population. The results are consistent with entrepreneurial theories of market competition suggesting that entry follows profit opportunities but does not deplete them. |
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