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Provedor de dados:  AgEcon
País:  United States
Título:  Why Do Rural Firms Live Longer?
Autores:  Yu, Li
Orazem, Peter F.
Jolly, Robert W.
Data:  2009-10-13
Ano:  2009
Palavras-chave:  Rural
Urban
Entry
Exit
Survival
Sorting
Salvage value
Community/Rural/Urban Development
Demand and Price Analysis
Financial Economics
Industrial Organization
Labor and Human Capital
Marketing
Production Economics
Productivity Analysis
Risk and Uncertainty
O18
L21
D92
Resumo:  Rural firms have a higher survival rate than urban firms. Over the first 13 years after firm entry, the hazard rate for firm exits is persistently higher for urban firms. While differences in firm attributes explain some of the rural-urban gap in firm survival, rural firms retain a survival advantage 18.5% greater than observationally equivalent urban firms. We argue that in competitive markets, the remaining survival advantage for rural firms must be attributable to unobserved factors that must be known at the time of entry. A plausible candidate for such a factor is thinner markets for the capital of failed rural firms. The implied lower salvage value of rural firms suggests that firms sorting into rural markets must have a higher probability of success in order to leave their expected profits equal to what they could earn in an urban market.
Tipo:  Working or Discussion Paper
Idioma:  Inglês
Identificador:  http://purl.umn.edu/54081
Relação:  Iowa State University>Department of Economics>Working Papers
Econ Working Paper
09013
Formato:  37
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