Small firms in Portugal: a selective survey of stylized facts, economic analysis, and policy implications

Abstract

L11, Small firms, Firm dynamics, Public policy,

Business Demography Dynamics in Portugal: A Non-Parametric Survival Analysis

“…In particular, for markets where entry occurs more intensively, exit flows tend to be more prominent, as well as churning at the bottom of the size distribution (Geroski, 1995). Portugal traditionally exhibits some of the highest levels of entry and exit rates in Europe (Eurostat, 2009;INE, 2009;Scarpetta et al, 2002;Cabral, 2007). More than a quarter of firms in a given year are either being created or destroyed (according to Table 2, during the period 1987-2005, the average churn rate has been 28,5%).…”

“…During this period, the change of economic structure towards the service sector and the smaller average size of entrants can explain part of this dynamics (Sarmento and Nunes, 2009 Throwing additional light on cross-sectional differences in market conditions, one finds that entry and exit rates are highly correlated across industries (Table 1). Thus, industries with higher than average entry rates also exhibit higher than average exit rates (Cabral, 2007), corroborating the idea that "entry barriers are exit barriers" (Mata et al, 1995). We find that across all sectors, at the one letter level, there is a considerably high correlation for the period 1995-2005, with the exception of the sector "Production and distribution of electricity, gas and water", due to its particular market structure where heavily regulation and legal monopolies are often common.…”

“…There is scarce evidence of studies on entrepreneurial activity that encompass simultaneously all sectors, regions and countries. Portugal is somehow an exception, where extensive research has been done in firm dynamics using mostly Quadros de Pessoal (Mata and Portugal, 1994;Mata et al, 1995;Mata, 1993;Mata and Machado, 1996;Görg et al, 2000;Baptista et al, 2008;Cabral, 2007;Cabral and Mata, 2003;Baptista and Carias, 2007;Baptista and Mendonça, 2007).…”

The dynamics of employer enterprise creation in Portugal over the last two decades: a firm size, regional and sectoral perspective

“…The body of research published so far on entry has engendered a series of persistent and compelling stylized facts about firm dynamics, which are observed in a wide spectrum of countries (Carreira and Teixeira, 2011;Klapper et al, 2009;Plehn-Djowich, 2009;Cabral, 2007;Bartelsman et al, 2005;Geroski, 1995;Siegfried and Evans, 1994). One of the less controversial stylized facts is that net entry is far less important than the corresponding gross flows of entry and exit.…”

“…Various studies have documented substantial rates of entry/exit in a number of countries (Klapper et al, 2008;Cabral, 2007;European Commission, 2003;Caves, 1998;Masso et al, 2004;Scarpetta et al, 2002;Ahn, 2001). Among European countries, Portugal records one of the highest rates of new firms relative to the stock of existing enterprises, irrespective of the selected methodology (OECD, 2009;Schrör, 2009;INE, 2009;Cabral, 2007;Bartelsman et al, 2004;Scarpetta et al, 2002). The Structural Business Statistics data by Eurostat (Schrör, 2009) (Sarmento and Nunes, 2010b).…”