Firm Size and Short-Term Dynamics in Aggregate Entry and Exit

Much of the research on industry dynamics focuses on the interdependence between the sectorial rates of entry and exit. This paper argues that the size of firms and the reaction-adjustment period are important conditions missed in this literature. I illustrate the effects of this omission using data from the Spanish manufacturing industries between 1994 and 2001. Estimates from systems of equations models provide evidence of a conical revolving door phenomenon and of partial adjustments in the replacement-displacement of large firms. KEYWORDS: aggregation, industry dynamics, panel data, symmetry, simultaneity. JEL CLASSIFICATION: C33, C52, L60, L11

Determinants of entry and exit in the foreign owned sector of UK manufacturing

This paper examines the extent to which foreign entry and exit in the UK is related to domestic industry characteristics. The units of analysis are firm numbers, and thus entry and exit at the industry level are treated as being generated by Poisson processes. This therefore uses quasimaximum likelihood estimation, to estimate entry and exit functions simultaneously. The results demonstrate that foreign entry is attracted by industry level profitability and performance, but that firm specific 'ownership' advantages are also important. The results also demonstrate that inward investors that are motivated by the desire to exploit firm-specific assets, are unlikely to be more transient than domestic firms. This however, cannot be said of those foreign entrants who are attracted to the UK by location advantage or investment incentives.

Exits, entrances and entrepreneurship : an exploration of economic theories of entrepreneurship through new independent entry and infant exit

The thesis began as a study of new firm formation. Preliminary research suggested that infant death rate was considered to be a closely related problem and the search was for a theory of new firm formation which would explain both. The thesis finds theories of exit and entry inadequate in this respect and focusses instead on theories of entrepreneurship, particularly those which concentrate on entrepreneurship as an agent of change. The role of information is found to be fundamental to economic change and an understanding of information generation and dissemination and the nature and direction of information flows is postulated to lead coterminously to an understanding of entrepreneurhsip and economic change. The economics of information is applied to theories of entrepreneurhsip and some testable hypotheses are derived. The testing relies on etablishing and measuring the information bases of the founders of new firms and then testing for certain hypothesised differences between the information bases of survivors and non-survivors. No theory of entrepreneurship is likely to be straightforwardly testable and many postulates have to be established to bring the theory to a testable stage. A questionnaire is used to gather information from a sample of firms taken from a new micro-data set established as part of the work of the thesis. Discriminant Analysis establishes the variables which best distinguish between survivors and non-survivors. The variables which emerge as important discriminators are consistent with the theory which the analysis is testing. While there are alternative interpretations of the important variables, collective consistency with the theory under test is established. The thesis concludes with an examination of the implications of the theory for policy towards stimulating new firm formation.

Recruitment, retention and exit from union membership. An analysis of member flows in Swiss union locals

This article enquires into the causes of union growth and decline by analysing flows in and out of membership at the level of 70 Swiss union locals over 2006-2008. Gross flows in union membership are much larger than the resulting net changes: annual membership turnover of 10 per cent is a surprisingly constant feature across unions. Net changes in membership are primarily determined by inflows: successful and languishing union locals differ in their entry rates, whereas exit rates are similar. Variance in union locals' entry rates is not usefully explained by the labour market context, but by differences in union strategy.

Identification of the coupling between skeletal muscle store-operated Ca2+ entry and the inositol trisphosphate receptor

Examination of store-operated Ca2+ entry (SOC) in single, mechanically skinned skeletal muscle cells by confocal microscopy shows that the inositol 1,4,5-trisphosphate (IP3) receptor acts as a sarcoplasmic reticulum [Ca2+] sensor and mediates SOC by physical coupling without playing a key role in Ca2+ release from internal stores, as is the case with various cell types in which SOC was investigated previously. The results have broad implications for understanding the mechanism of SOC that is essential for cell function in general and muscle function in particular. Moreover, the study ascribes an important role to the IN receptors in skeletal muscle, the role of which with respect to Ca2+ homeostasis was ill defined until now.

Chlamydia trachomatis serotype A infections in the Amazon region of Brazil: prevalence, entry and dissemination

INTRODUCTION: Chlamydia infection is associated with debilitating human diseases including trachoma, pneumonia, coronary heart disease and urogenital diseases. Serotypes of C. trachomatis show a fair correlation with the group of diseases they cause, and their distribution follows a well-described geographic pattern. Serotype A, a trachoma-associated strain, is known for its limited dissemination in the Middle East and Northern Africa. However, knowledge on the spread of bacteria from the genus Chlamydia as well as the distribution of serotypes in Brazil is quite limited. METHODS: Blood samples of 1,710 individuals from ten human population groups in the Amazon region of Brazil were examined for antibodies to Chlamydia using indirect immunofluorescence and microimmunofluorescence assays. RESULTS: The prevalence of antibodies to Chlamydia ranged from 23.9% (Wayana-Apalai) to 90.7% (Awa-Guaja) with a mean prevalence of 50.2%. Seroreactivity was detected to C. pneumoniae and to all serotypes of C. trachomatis tested; furthermore, we report clear evidence of the as-yet-undescribed occurrence of serotype A of C. trachomatis. CONCLUSIONS: Specific seroreactivity not only accounts for the large extent of dissemination of C. trachomatis in the Amazon region of Brazil but also shows an expanded area of occurrence of serotype A outside the epidemiological settings previously described. Furthermore, these data suggest possible routes of Chlamydia introduction into the Amazon region from the massive human migration that occurred during the 1,700s.

Entry and market selection of firms: a laboratory study

We study competition in experimental markets in which two incumbents face entry by three other firms. Our treatments vary with respect to three factors: sequential vs. block or simultaneous entry, the cost functions of entrants and the amount of time during which incumbents are protected from entry. Before entry incumbents are able to collude in all cases. When all firms' costs are the same entry always leads consumer surplus and profits to their equilibrium levels. When entrants are more efficient than incumbents, entry leads consumer surplus to equilibrium. However, total profits remain below equilibrium, due to the fact that the inefficient incumbents produce too much and efficient entrants produce too little. Market behavior is satisfactory from the consumers' standpoint, but does not yield adequate signals to other potential entrants. These results are not affected by whether entry is simultaneous or sequential. The length of the incumbency phase does have some subtle effects.

Export-market dynamics and the probability of firm closure: Evidence for the UK

This study presents the first empirical analysis of the determinants of firm closure in the UK with an emphasis on the role of export-market dynamics, using panel data for a nationally representative group of firms operating in all-market based sectors during 1997-2003. Our findings show that the probability of closure is (cet. par.) significantly lower for exporters, particularly those experiencing export-market entry and exit. Having controlled for other attributes associated with productivity (such as size and export status), the following factors are found to increase the firm’s survival prospects: higher capital intensity and TFP, foreign ownership, young age, displacement effects (through relatively high rates of entry of firms in each industry), and belonging to certain industries. Interestingly, increased import penetration (a proxy for lower trade costs) leads to a lower hazard rate for exporting entrants and continuous exporters, whilst inducing a higher hazard rate for domestic producers or those that quit exporting.

Investment, duration, and exit strategies for corporate and independent venture capital-backed start-ups

We propose a model of investment, duration, and exit strategies for start-ups backed by venture capital (VC) funds that accounts for the high level of uncertainty, the asymmetry of information between insiders and outsiders, and the discount rate. Our analysis predicts that start-ups backed by corporate VC funds remain for a longer period of time before exiting and receive larger investment amounts than those financed by independent VC funds. Although a longer duration leads to a higher likelihood of an exit through an acquisition, a larger investment increases the probability of an IPO exit. These predictions find strong empirical support.

Financial Markets and Real Ecinomy: Four Essays in International Trade

Financial markets play an important role in an economy performing various functions like mobilizing and pooling savings, producing information about investment opportunities, screening and monitoring investments, implementation of corporate governance, diversification and management of risk. These functions influence saving rates, investment decisions, technological innovation and, therefore, have important implications for welfare. In my PhD dissertation I examine the interplay of financial and product markets by looking at different channels through which financial markets may influence an economy.My dissertation consists of four chapters. The first chapter is a co-authored work with Martin Strieborny, a PhD student from the University of Lausanne. The second chapter is a co-authored work with Melise Jaud, a PhD student from the Paris School of Economics. The third chapter is co-authored with both Melise Jaud and Martin Strieborny. The last chapter of my PhD dissertation is a single author paper.Chapter 1 of my PhD thesis analyzes the effect of financial development on growth of contract intensive industries. These industries intensively use intermediate inputs that neither can be sold on organized exchange, nor are reference-priced (Levchenko, 2007; Nunn, 2007). A typical example of a contract intensive industry would be an industry where an upstream supplier has to make investments in order to customize a product for needs of a downstream buyer. After the investment is made and the product is adjusted, the buyer may refuse to meet a commitment and trigger ex post renegotiation. Since the product is customized to the buyer's needs, the supplier cannot sell the product to a different buyer at the original price. This is referred in the literature as the holdup problem. As a consequence, the individually rational suppliers will underinvest into relationship-specific assets, hurting the downstream firms with negative consequences for aggregate growth. The standard way to mitigate the hold up problem is to write a binding contract and to rely on the legal enforcement by the state. However, even the most effective contract enforcement might fail to protect the supplier in tough times when the buyer lacks a reliable source of external financing. This suggests the potential role of financial intermediaries, banks in particular, in mitigating the incomplete contract problem. First, financial products like letters of credit and letters of guarantee can substantially decrease a risk and transaction costs of parties. Second, a bank loan can serve as a signal about a buyer's true financial situation, an upstream firm will be more willing undertake relationship-specific investment knowing that the business partner is creditworthy and will abstain from myopic behavior (Fama, 1985; von Thadden, 1995). Therefore, a well-developed financial (especially banking) system should disproportionately benefit contract intensive industries.The empirical test confirms this hypothesis. Indeed, contract intensive industries seem to grow faster in countries with a well developed financial system. Furthermore, this effect comes from a more developed banking sector rather than from a deeper stock market. These results are reaffirmed examining the effect of US bank deregulation on the growth of contract intensive industries in different states. Beyond an overall pro-growth effect, the bank deregulation seems to disproportionately benefit the industries requiring relationship-specific investments from their suppliers.Chapter 2 of my PhD focuses on the role of the financial sector in promoting exports of developing countries. In particular, it investigates how credit constraints affect the ability of firms operating in agri-food sectors of developing countries to keep exporting to foreign markets.Trade in high-value agri-food products from developing countries has expanded enormously over the last two decades offering opportunities for development. However, trade in agri-food is governed by a growing array of standards. Sanitary and Phytosanitary standards (SPS) and technical regulations impose additional sunk, fixed and operating costs along the firms' export life. Such costs may be detrimental to firms' survival, "pricing out" producers that cannot comply. The existence of these costs suggests a potential role of credit constraints in shaping the duration of trade relationships on foreign markets. A well-developed financial system provides the funds to exporters necessary to adjust production processes in order to meet quality and quantity requirements in foreign markets and to maintain long-standing trade relationships. The products with higher needs for financing should benefit the most from a well functioning financial system. This differential effect calls for a difference-in-difference approach initially proposed by Rajan and Zingales (1998). As a proxy for demand for financing of agri-food products, the sanitary risk index developed by Jaud et al. (2009) is used. The empirical literature on standards and norms show high costs of compliance, both variable and fixed, for high-value food products (Garcia-Martinez and Poole, 2004; Maskus et al., 2005). The sanitary risk index reflects the propensity of products to fail health and safety controls on the European Union (EU) market. Given the high costs of compliance, the sanitary risk index captures the demand for external financing to comply with such regulations.The prediction is empirically tested examining the export survival of different agri-food products from firms operating in Ghana, Mali, Malawi, Senegal and Tanzania. The results suggest that agri-food products that require more financing to keep up with food safety regulation of the destination market, indeed sustain longer in foreign market, when they are exported from countries with better developed financial markets.Chapter 3 analyzes the link between financial markets and efficiency of resource allocation in an economy. Producing and exporting products inconsistent with a country's factor endowments constitutes a serious misallocation of funds, which undermines competitiveness of the economy and inhibits its long term growth. In this chapter, inefficient exporting patterns are analyzed through the lens of the agency theories from the corporate finance literature. Managers may pursue projects with negative net present values because their perquisites or even their job might depend on them. Exporting activities are particularly prone to this problem. Business related to foreign markets involves both high levels of additional spending and strong incentives for managers to overinvest. Rational managers might have incentives to push for exports that use country's scarce factors which is suboptimal from a social point of view. Export subsidies might further skew the incentives towards inefficient exporting. Management can divert the export subsidies into investments promoting inefficient exporting.Corporate finance literature stresses the disciplining role of outside debt in counteracting the internal pressures to divert such "free cash flow" into unprofitable investments. Managers can lose both their reputation and the control of "their" firm if the unpaid external debt triggers a bankruptcy procedure. The threat of possible failure to satisfy debt service payments pushes the managers toward an efficient use of available resources (Jensen, 1986; Stulz, 1990; Hart and Moore, 1995). The main sources of debt financing in the most countries are banks. The disciplining role of banks might be especially important in the countries suffering from insufficient judicial quality. Banks, in pursuing their rights, rely on comparatively simple legal interventions that can be implemented even by mediocre courts. In addition to their disciplining role, banks can promote efficient exporting patterns in a more direct way by relaxing credit constraints of producers, through screening, identifying and investing in the most profitable investment projects. Therefore, a well-developed domestic financial system, and particular banking system, would help to push a country's exports towards products congruent with its comparative advantage.This prediction is tested looking at the survival of different product categories exported to US market. Products are identified according to the Euclidian distance between their revealed factor intensity and the country's factor endowments. The results suggest that products suffering from a comparative disadvantage (labour-intensive products from capital-abundant countries) survive less on the competitive US market. This pattern is stronger if the exporting country has a well-developed banking system. Thus, a strong banking sector promotes exports consistent with a country comparative advantage.Chapter 4 of my PhD thesis further examines the role of financial markets in fostering efficient resource allocation in an economy. In particular, the allocative efficiency hypothesis is investigated in the context of equity market liberalization.Many empirical studies document a positive and significant effect of financial liberalization on growth (Levchenko et al. 2009; Quinn and Toyoda 2009; Bekaert et al., 2005). However, the decrease in the cost of capital and the associated growth in investment appears rather modest in comparison to the large GDP growth effect (Bekaert and Harvey, 2005; Henry, 2000, 2003). Therefore, financial liberalization may have a positive impact on growth through its effect on the allocation of funds across firms and sectors.Free access to international capital markets allows the largest and most profitable domestic firms to borrow funds in foreign markets (Rajan and Zingales, 2003). As domestic banks loose some of their best clients, they reoptimize their lending practices seeking new clients among small and younger industrial firms. These firms are likely to be more risky than large and established companies. Screening of customers becomes prevalent as the return to screening rises. Banks, ceteris paribus, tend to focus on firms operating in comparative-advantage sectors because they are better risks. Firms in comparative-disadvantage sectors finding it harder to finance their entry into or survival in export markets either exit or refrain from entering export markets. On aggregate, one should therefore expect to see less entry, more exit, and shorter survival on export markets in those sectors after financial liberalization.The paper investigates the effect of financial liberalization on a country's export pattern by comparing the dynamics of entry and exit of different products in a country export portfolio before and after financial liberalization.The results suggest that products that lie far from the country's comparative advantage set tend to disappear relatively faster from the country's export portfolio following the liberalization of financial markets. In other words, financial liberalization tends to rebalance the composition of a country's export portfolio towards the products that intensively use the economy's abundant factors.

Entry and transcription as key determinants of differences in CD4 T-cell permissiveness to human immunodeficiency virus type 1 infection.

Isolated primary human cells from different donors vary in their permissiveness-the ability of cells to be infected and sustain the replication of human immunodeficiency virus type 1 (HIV-1). We used replicating HIV-1 and single-cycle lentivirus vectors in a population approach to identify polymorphic steps during viral replication. We found that phytohemagglutinin-stimulated CD4(+) CD45RO(+) CD57(-) T cells from healthy blood donors (n = 128) exhibited a 5.2-log-unit range in virus production. For 20 selected donors representing the spectrum of CD4 T-cell permissiveness, we could attribute up to 42% of the total variance in virus production to entry factors and 48% to postentry steps. Efficacy at key intracellular steps of the replicative cycle (reverse transcription, integration, transcription and splicing, translation, and budding and release) varied from 0.71 to 1.45 log units among donors. However, interindividual differences in transcription efficiency alone accounted for 64 to 83% of the total variance in virus production that was attributable to postentry factors. While vesicular stomatitis virus G protein-mediated fusion was more efficacious than CCR5/CD4 entry, the latter resulted in greater transcriptional activity per proviral copy. The phenotype of provirus transcription was stable over time, indicating that it represents a genetic trait.

A detailed urinary excretion time course study of captan and folpet biomarkers in workers for the estimation of dose, main route-of-entry and most appropriate sampling and analysis strategies

Captan and folpet are two fungicides largely used in agriculture, but biomonitoring data are mostly limited to measurements of captan metabolite concentrations in spot urine samples of workers, which complicate interpretation of results in terms of internal dose estimation, daily variations according to tasks performed, and most plausible routes of exposure. This study aimed at performing repeated biological measurements of exposure to captan and folpet in field workers (i) to better assess internal dose along with main routes-of-entry according to tasks and (ii) to establish most appropriate sampling and analysis strategies. The detailed urinary excretion time courses of specific and non-specific biomarkers of exposure to captan and folpet were established in tree farmers (n = 2) and grape growers (n = 3) over a typical workweek (seven consecutive days), including spraying and harvest activities. The impact of the expression of urinary measurements [excretion rate values adjusted or not for creatinine or cumulative amounts over given time periods (8, 12, and 24 h)] was evaluated. Absorbed doses and main routes-of-entry were then estimated from the 24-h cumulative urinary amounts through the use of a kinetic model. The time courses showed that exposure levels were higher during spraying than harvest activities. Model simulations also suggest a limited absorption in the studied workers and an exposure mostly through the dermal route. It further pointed out the advantage of expressing biomarker values in terms of body weight-adjusted amounts in repeated 24-h urine collections as compared to concentrations or excretion rates in spot samples, without the necessity for creatinine corrections.

Unidirectional quantum walks: Evolution and exit times

In this paper we focus our attention on a particle that follows a unidirectional quantum walk, an alternative version of the currently widespread discrete-time quantum walk on a line. Here the walker at each time step can either remain in place or move in a fixed direction, e.g., rightward or upward. While both formulations are essentially equivalent, the present approach leads us to consider discrete Fourier transforms, which eventually results in obtaining explicit expressions for the wave functions in terms of finite sums and allows the use of efficient algorithms based on the fast Fourier transform. The wave functions here obtained govern the probability of finding the particle at any given location but determine as well the exit-time probability of the walker from a fixed interval, which is also analyzed.

Role of PheE15 gate in ligand entry and nitric oxide detoxification function of Mycobacterium tuberculosis truncated hemoglobin N

The truncated hemoglobin N, HbN, of Mycobacterium tuberculosis is endowed with a potent nitric oxide dioxygenase (NOD) activity that allows it to relieve nitrosative stress and enhance in vivo survival of its host. Despite its small size, the protein matrix of HbN hosts a two-branched tunnel, consisting of orthogonal short and long channels, that connects the heme active site to the protein surface. A novel dual-path mechanism has been suggested to drive migration of O(2) and NO to the distal heme cavity. While oxygen migrates mainly by the short path, a ligand-induced conformational change regulates opening of the long tunnel branch for NO, via a phenylalanine (PheE15) residue that acts as a gate. Site-directed mutagenesis and molecular simulations have been used to examine the gating role played by PheE15 in modulating the NOD function of HbN. Mutants carrying replacement of PheE15 with alanine, isoleucine, tyrosine and tryptophan have similar O(2)/CO association kinetics, but display significant reduction in their NOD function. Molecular simulations substantiated that mutation at the PheE15 gate confers significant changes in the long tunnel, and therefore may affect the migration of ligands. These results support the pivotal role of PheE15 gate in modulating the diffusion of NO via the long tunnel branch in the oxygenated protein, and hence the NOD function of HbN.