Do Services Differ from Manufacturing? The Post-Entry Performance of Firms in Dutch Services

CEPR Discussion Paper Series Number 1718

Posted: 3 Mar 1998

See all articles by David B. Audretsch

David B. Audretsch

Indiana University - Institute for Development Strategies; King Saud University; WHU - Otto Beisheim School of Management; Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

Luuk Klomp

Erasmus Research Institute of Management (ERIM)

Roy Thurik

Montpellier Business School; Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC); Erasmus Research Institute of Management (ERIM); EIM Netherlands - Business and Policy Research; Tinbergen Institute

Date Written: November 1997

Abstract

A large literature has emerged focusing on the post-entry performance of firms and, in particular, on the links between firm growth, survival, size and age. While these studies have resulted in findings that are sufficiently consistent as to constitute stylized facts, virtually all of these studies are based on manufacturing. The purpose of this paper is to fill this gap in knowledge about the role of non-manufacturing in industrial organization and, in particular, in the post-entry performance of firms, or what happens to firms subsequent to entering an industry. We suggest theoretical reasons why the relationships between firm age and size on the one hand, and survival and growth on the other may, in fact, not be the same in services as they are for manufacturing. We use a longitudinal database for Dutch firms in the retail and hotel and catering sectors to identify around 13,000 new-firm start-ups and 47,000 incumbents in the services and track them over subsequent years. We are then able test to see whether the stylized results identified, based on manufacturing, still hold in the services. The results suggest that the most fundamental relationships between firm size, age, survival and growth are strikingly different for services than for manufacturing. In terms of the dynamics of industrial organization, services may, in fact, not simply mirror the manufacturing sector.

JEL Classification: L80, L10

Suggested Citation

Audretsch, David B. and Klomp, Luuk and Thurik, Roy, Do Services Differ from Manufacturing? The Post-Entry Performance of Firms in Dutch Services (November 1997). CEPR Discussion Paper Series Number 1718, Available at SSRN: https://ssrn.com/abstract=63815

David B. Audretsch (Contact Author)

Indiana University - Institute for Development Strategies ( email )

1315 East Tenth Street
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King Saud University ( email )

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WHU - Otto Beisheim School of Management ( email )

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Germany

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

Luuk Klomp

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1517 (Phone)
+31 10 452 2028 (Fax)

Roy Thurik

Montpellier Business School

France

Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC) ( email )

3000 DR Rotterdam
Netherlands
+31 10 408 2232 (Phone)
+31 10 408 9146 (Fax)

HOME PAGE: http://www.thurik.com

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

EIM Netherlands - Business and Policy Research

Postbus 7001
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Netherlands
+31 79 341 3634 (Phone)
+31 79 331 3742 (Fax)

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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