Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110994
Authors: 
Burke, Andrew
Görg, Holger
Hanley, Aoife
Year of Publication: 
2006
Series/Report no.: 
Papers on Entrepreneurship, Growth and Public Policy 1205
Abstract: 
The paper uses a unique dataset comprising the population of new ventures that enter the UK market in 1998. We argue that we would expect the effect of market concentration on firm survival to be different according to whether an industry is static (low entry and exit) or dynamic. In our empirical analysis we find support for this hypothesis. Industry concentration rates reduce the survival of new plants but only in markets marked by low entry and exit rates. Specifically, a 10 percent increase in the 5-firm concentration ratio or the Herfindahl index in a dynamic market, raises the survival rate of new ventures by approximately 2 percent. Our results suggest greater leniency towards more dominant firms in industries showing buoyant entry and exit rates.
Subjects: 
new firms
start-ups
survival
dynamism
competition policy
industry concentration
JEL: 
L11
L25
M13
M40
Document Type: 
Working Paper

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