Sunk costs and the growth and failure of small business

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Title: Sunk costs and the growth and failure of small business
Authors: Walsh, Patrick P.
Permanent link: http://hdl.handle.net/10197/976
Date: 2000
Abstract: We model the growth and failure of small business in Irish Manufacturing during the period 1973-1994. We estimate the effect of start-up size on the employment growth while controlling for the business cycle, the life cycle and the probability of business survival, amongst other factors. Learning models of firm selection and evolution are accepted in Homogenous Goods but rejected in R&D sectors. Due to high (low) entry and failure costs in R&D (Homogenous Goods) sectors, learning is undertaken ex-ante (ex-post), inducing entry with certainty (uncertainty) concerning ex-post performance, causing Gibrat’s law to hold (fail).
Type of material: Working Paper
Publisher: Trinity College Dublin. Department of Economics
Series/Report no.: Trinity Economic Paper Series; No. 2000/2
Copyright (published version): Trinity College Dublin, Department of Economics 2000
Subject LCSH: Small business--Ireland
Small business--Growth
Sunk costs
Other versions: http://www.tcd.ie/Economics/TEP/2000_papers/TEPNo2PW20.pdf
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Politics and International Relations Research Collection
Geary Institute Research Collection

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