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While recent years have witnessed a growing interest in research on market entry by new firms, evidence regarding their postentry performance is scarce. This paper uses longitudinal data for small firms that entered German manufacturing industries between 1979 and 1982 and monitors their performance until 1990. Entrants face a high risk of failure, hazard rates tend to increase during the first years and to decrease afterwards. Decline of employment in a cohort due to exits and shrinking firms is compensated by growing survivors. No clear-cut nexus between start-up size and probability of survival shows up. Copyright 1994 by Blackwell Publishing Ltd.
Joachim Wagner (Wed,) studied this question.