ABSTRACT
There might be at least three different reasons for expecting KBIs to have a different behavioural pattern than the one found in other industries: demand directed to KBIs grows faster; these industries tend to be younger in terms of their industry and technology life-cycles; and they may face different sets of entry and exit barriers, particularly with regard to the need to invest in specialized knowledge assets. As is well known, the empirical evidence drawn from several studies on industry dynamics has enabled the identification of some statistical regularities, which are often taken as stylized facts/stylized results on how firms and industries evolve over time (for surveys see Caves 1998; Dosi et al. 1997; Geroski 1995). Such statistical regularities include the following: the entry and exit of firms are both frequent phenomena, implying high levels of firm turnover in most industries; a high number of new firms leave the market shortly after entry; firm entry and exit are very often correlated, frequently being associated with similar determinants; entering and exiting firms are typically smaller than the average incumbent (which means that the impact of entry and exit on worker turnover tends to be lower than the impact on firm turnover); both the size and the age of firms have a positive impact on their survival chances, and usually a negative impact on growth. In this chapter, we intend to discuss the extent to which KBIs differ from other industries in relation to some of the stylized facts and regularities of industry dynamics that have just been mentioned. In particular, we analyse the patterns and the determinants of firm entry and post-entry performance (measured in terms of the survival of new firms), comparing groups of KBIs with the remaining industries and using data for the Portuguese economy in the second half of the 1990s. The chapter is organized as follows: in the following section, we present the data sources and propose our own classification for KBIs (an alternative to the one used by the OECD); Section 3 includes some relevant statistics on the entry and survival of new firms; in Section 4, the models used in the chapter are described; Section 5 presents results for industry entry rates and Section 6 deals with the determinants of new-firm survival; finally, Section 7 concludes.
