Georgios Fotopoulos

Location and Survival of New Entry

Drawing from two different strands of literature, industrial ecology and spatial analysis, the paper attempts to examine the role that location plays in determining firm survival. A time-varying covariates hazard model is used on Greek firms, which enter manufacturing in the early 1980s and are followed up to 1992. Location in Greater Athens vs. the rest of the country affects survival positively, especially when smaller firms are concerned. Other firm variables such as current size, profitability, leverage and capital together with growth and industry contestability are also found to affect survival, which becomes more difficult for firms established closer to recessions.

Entry and exit from manufacturing industries: symmetry, turbulence and simultaneity - some empirical evidence from Greek manufacturing industries, 1982-1988

The interdependence between entry and exit of firms into manufacturing industries is the focus of this research. When both entry and exit equations are estimated separately the results support the existence of strong symmetry in their determinants. When, however, entry and exit are estimated within a simultaneous equation framework, the empirical evidence does not offer sufficient grounds to support the notion that entry and exit are simultaneously linked. Instead it seems that they are two contemporaneously related processes which respond in like fashion to the structural characteristics found in particular industries. Their linked response is also extended to factors unaccounted for by the individual entry and exit formulations, and this expresses itself in significant contemporaneous correlation between the entry and exit equation residuals. The change in the identities of firms operating, implied by the positive correlation between entry and exit, may then be attributed to industry turbulent conditions, which in turn appear perhaps to be conditioned in the shorter run by time-invariant inter-industry differences in technological factors and sunk costs.

Regional Variations of Firm Births, Deaths and Growth Patterns in the UK, 1980-1991

One of the debates around new firm formation across sub-national territories focuses on whether regional differences in industrial structure are more important influences than regional differences in individual industry performance. The present research, using Value Added Tax (VAT) registration data, attempts to make a contribution to this debate in the United Kingdom (UK) context using a shift-share covariance model. Firm de-registrations and, as a consequence, net changes in firm stocks are also analyzed with similar questions in mind. The findings show that although the effects of industrial mix are significant across most regions, in several key regional contexts the industrial competitive effect dominates. The issue of the role of regional industrial concentration forms a second major theme of this paper. This basically involves a questioning as to whether concentration is a positive or negative force for new firm formation. The results of this research indicate that industrial concentration, measured through localization, is more important for firm deaths than for firm births (although significant for both), but not particularly relevant to the understanding of the net outcome of entry and exit processes. In the UK, regions with higher levels of industry concentration seem to be associated overall with relatively lower levels of both firm births and deaths. Copyright 2001 Gatton College of Business and Economics, University of Kentucky.

Accounting for Net Entry into Greek Manufacturing by Establishments of Varying Size

Adopting the view that size matters in understanding entry (exit) patterns, this research explores the nature and causes of net entry patterns of various size-defined groups of establishments in the case of a less industrialised country – Greece. The hypothesis to be tested is that the determinants of entry are not independent of firm size. Throughout this paper the analysis has had to confront difficulties arising from the use of net entry rates defined at the size class level. The degree of size disaggregation used in this paper is considerably finer than used before. Five employment-defined size classes have been used instead of sliding cut-off points discriminating between small and large firms. Unlike other research using pooled models to explain variation in entry (exit) rates across industries, the data used here are characterised by the absence of significant industry-specific systematic variation. Overall, the results obtained in this paper indicate that there is a gradation in the responses of different size classes to stimuli defined at the industry level. Evidence is offered that small firms are different in that they manage to overcome entry barriers, perhaps adopting different survival strategies, and that large firms are well aware of market conditions and are in an advantageous position to overcome many of the problems imposed by entry barriers. Size classes in the middle of the size class distribution offer a rather mixed result due to size-related advantages and disadvantages.

Peripherality and integration: industrial growth and decline in the Greek regions

Peripheral European economies are often characterized by unfavorable structural regularities and geographical coordinates, making the process of economic integration an experience possibly associated with welfare losses at the regional level. Such types of arguments are at variance with the neoclassical understanding of the operation of the spatial economy, making the study of a weak industrial base in the EU periphery an interesting assignment with implications for theory and policy. We develop an empirical model accounting for industrial (manufacturing) growth and decline in the Greek regions in the period following EU membership (1981–2005). Given that Greek regions are characterized as lagging behind and structurally weak for the entire period under consideration, understanding the factors behind their industrial experience may have a value added for many regions with similar characteristics, especially in the new and potential EU member states.

Net entry behaviour in Greek manufacturing: consumer, intermediate and capital goods industries

Abstract This research explores the nature and causes of net entry of firms in three groups of Greek manufacturing industries–consumer, intermediate and capital goods. The research questions whether or not the determinants of net entry rates across sectors are different. Econometric analyses reveal that, indeed, there are significant differences in the determinants of net entry rates across industry groups, but also there is strong within-group correlation across sectors.

Net Entry of Firms into Greek Manufacturing: The Effects of Business Conditions

This research explores the nature and causes of net entry into manufacturing industry in Greece. Previous work has rarely considered these issues in the context of small, but open, and not particularly industrialised economies. The exact nature of the focus of interest – net entry – is discussed first, illustrating that this is a complex variable to account for, although arguably still interesting and useful. Net entry needs to be considered as variable worthy of study in its own right as it reflects an outcome of processes of gross entry and exit. Certainly it need not be interpreted only as entry as is often the case. Next comes the question of the degree of variation, both temporally and sectorally, that net entry exhibits in the context of contemporary Greek manufacturing. Some temporal variation in net entry rates is demonstrated, and there follows a discussion of how such variation might be explained potentially in theory. The empirical testing of these hypotheses point to findings that are different to those discovered in different contexts. For Greek manufacturing, profitable business opportunities were not shown to be a sufficient condition of higher net entry, but the cost advantages of large scale operations did both encourage entry and discourage exit. The cost of capital and the overall condition of the economy were negatively related to net entry. However the role of industry growth, import penetration and export orientation tend to confirm findings in other studies.

Integrating Firm Dynamics into the Shift-Share Framework

This article integrates firm birth and death data into a shift-share analysis framework. The proposed methodology can be used when data availability does not allow for the direct association of employment changes to business demographics at the regional level. It may be also used as an exploratory step before any explanatory econometric work is undertaken as a means of identifying classes of potential control variables. Applying the method to Greek data suggests that firm-size heterogeneity should not be ignored, that local conditions matter more than regional economic structure, and that the latter are asymmetrical across sectors when it comes to the effects of business demographics on regional employment or output growth. Copyright 2007 Blackwell Publishing.

Regional vs environmental policies for Balanced economic development: the case of the former Soviet Union

This article presents a method for analysing interregional differences and identifying a suitable combination of policies for a set of regions. The methodology is based on the development of a composite quality index and is illustrated using the case of the former Soviet Union in the early 1990s. The correlation between the quality of life values and the per capita European Union funding indicates that more funds are allocated to the countries with greater per capita income. The positioning of the FSU countries on a quality of life–per capita income mapping indicates whether emphasis should be placed on regional, environmental or sustainable development policies. Our analysis suggests that in the early 1990s sustainable development policies were best suited for Lithuania, Estonia, Latvia, Russia, Ukraine, Belarus, Azerbaijan, Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Tajikistan. Among these countries relatively more funds should be allocated for environmental and regional policies to Uzbekistan, Kyrgyzstan, Tajikistan, Kazakhstan and Turkmenistan. However, for balanced economic development in Georgia, Moldova and Armenia, the development of regional policies should be the priority.