Firm entry and turnover: the nexus with profitability and growth

Firm entry and turnover: the nexus with profitability and growth The paper presents a new sectoral taxonomy, which classifies industries according to the opportunity and cost of experimentation. Econometric tests show for a sample of 24 countries that in the 1990s ‘entrepreneurial’ industries 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’ industries generally earned a better profit-ratio than ‘routinised’ industries with an inertial population. The results are consistent with entrepreneurial theories of market competition, which suggest that entry follows profit opportunities but does not deplete them. Small Business Economics Springer Journals

Firm entry and turnover: the nexus with profitability and growth

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Springer US
Copyright © 2007 by Springer Science+Business Media, LLC
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
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