Review of Industrial Organization 16: 1–11, 2000.
© 2000 Kluwer Academic Publishers. Printed in the Netherlands.
Firm Survival in the Netherlands
DAVID B. AUDRETSCH
Indiana University, Bloomington, IN, U.S.A.; Centre for Economic Policy Research, London, U.K.;
and Tinbergen Institute of Erasmus University Rotterdam, the Netherlands
Centre for Advanced Small Business Economics (CASBEC), Erasmus University Rotterdam, the
A. ROY THURIK
Centre for Advanced Small Business Economics, Erasmus University Rotterdam, the Netherlands;
and EIM Small Business Research and Consultancy, Zoetermeer, the Netherlands
Abstract. The purpose of this paper is to examine whether the dynamics of industrial organization
differ in the Netherlands from what has emerged as a Stylized Fact in other countries. Because the
Netherlands has pursued a unique set of institutions and policies comprising what has become known
as the Polder Model, the factors leading to ﬁrm failure may systematically differ from those in other
countries. We address this question using a longitudinal database from Statistics Netherlands (CBS)
that identiﬁes over two thousand ﬁrms in manufacturing and then tracks their performance over time.
Key words: Exit, manufacturing industries, survival.
JEL classiﬁcation: L1
As Ed Mansﬁeld (1962) observed nearly three decades ago, virtually nothing was
known in the industrial organization literature about the dynamics of industrial
organization, or about what happens to ﬁrms over time.
The response of industrial
organization scholars was to generate a wave of studies in the past decade focusing
on the dynamics of industrial organization, and in particular, the propensity for
The authors would like to thank two referees and the editor of the Review of Industrial Or-
ganization for their comments and suggestions. We also extend special thanks to Luuk Klomp for
his advice and to the Statistics Netherlands for providing data. This paper was prepared while Au-
dretsch was visiting the Tinbergen Institute in Rotterdam and EIM Small Business and Consultancy
in Zoetermeer in 1997 and 1998.
According to Mansﬁeld (1962, p. 1023), “Because there have been so few econometric studies
of the birth, growth, and death of ﬁrms, we lack even crude answers to the following basic questions
regarding the dynamic processes governing an industry’s structure. What are the quantitative effects
of various factors on the rates of entry and exit? What have been the effects on a ﬁrm’s growth rate?
What determines the amount of mobility within an industry’s size structure?”