Flora Bellone (France, IDEFI-CNRS and University of Corsica), Patrick Musso, Michel Quéré

Analysing the Pre-Exit Performance of French Manufacturing Firms over the last decade

In this paper, we analyze the pre-exit performance of industrial firms using a French manufacturing firm-level dataset and focusing on the 1990-2000 period. Our empirical investigation is carried out from theoretical models of firm behaviour that allow heterogeneity among firms, idiosyncratic (or firm-specific) source of uncertainty, and discrete outcomes (entry and exit). We confirm the prediction of these models according to which exiting firms experience a decrease in their relative performance levels (in terms of total factor productivity) some times prior to their exit. However, we do not find similar patterns with regards to employment and value-added. Specifically, exiting firms do not exhibit a decreasing trend in their relative size some times prior to their exit.

Keywords: Entry and Exit patterns, Productivity Analysis

JEL Codes: D24, L11, L60

Session: 1d   Room 2004   Category: Business demographics and performance 1

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