Abstract:

We analyse the determinants of firm entry in developing countries using Argentina as an illustrative case. Our main finding is that although most of the regional determinants used in previous studies analysing developed countries are also relevant here, there is a need for additional explanatory variables that proxy for the specificities of developing economies (e.g., poverty, informal economy and idle capacity). We also find evidence of a core-periphery pattern in the spatial structure of entry that seems to be mostly driven by differences in agglomeration economies. Since regional policies aiming to attract new firms are largely based on evidence from developed countries, our results raise doubts about the usefulness of such policies when applied to developing economies.

Author affiliation: Calá, Carla Daniela. Universidad Nacional de Mar del Plata. Facultad de Ciencias Económicas y Sociales; Argentina.

Author affiliation: Manjón-Antolín, Miguel. Universitat Rovira i Virgili. Departamento de Economía; España.

Author affiliation: Arauzo-Carod, Josep-Maria. Institut d'Economia de Barcelona; España.

Abstract:

Regional policies aiming to attract new firms are largely based on evidence that originates from Europe, the USA and Japan. This may raise doubts about the usefulness of such policies when applied to developing economies. This paper addresses this issue by providing estimates of the determinants of firm entry in the Argentinean provinces. We find that most of the determinants used in previous studies analysing developed countries are still relevant. However, there is a need for additional explanatory variables that reflect the specificities of developing economies.

Author affiliation: Calá, Carla Daniela. Universidad Nacional de Mar del Plata. Facultad de Ciencias Económicas y Sociales; Argentina.

Author affiliation: Arauzo-Carod, Josep-Maria. Institut d'Economia de Barcelona; España.

Author affiliation: Manjón-Antolín, Miguel. Universitat Rovira i Virgili. Departamento de Economía; España.

Abstract:

This paper analyses the regional determinants of exit in Argentina. We find evidence of a dynamic revolving door by which past entrants increase current exits, particularly in the peripheral regions. In the central regions, current and past incumbents cause an analogous displacement effect. Also, exit shows a U-shaped relationship with respect to the informal economy, although the positive effect is weaker in the central regions. These findings point to the existence of a core-periphery structure in the spatial distribution of exits.

Author affiliation: Calá, Carla Daniela. Universidad Nacional de Mar del Plata. Facultad de Ciencias Económicas y Sociales; Argentina.

Author affiliation: Manjón-Antolín, Miguel. Universitat Rovira i Virgili. Departamento de Economía; España.

Author affiliation: Arauzo-Carod, Josep-Maria. Institut d'Economia de Barcelona; España.

Abstract:

This paper analyses the regional determinants of exit in developing countries, using Argentina as an illustrative case. We find evidence of a dynamic revolving door by which past entrants increase current exits, particularly in the peripheral regions. In the central regions, current and past incumbents cause an analogous displacement effect. Also, exit shows a U-shaped relationship with respect to the informal economy, although the positive effect is weaker in the central regions. These findings point to the existence of a core-periphery structure in the spatial distribution of exits.

Author affiliation: Calá, Carla Daniela. Universidad Nacional de Mar del Plata. Facultad de Ciencias Económicas y Sociales; Argentina.

Author affiliation: Arauzo-Carod, Josep-Maria. Institut d'Economia de Barcelona; España.

Author affiliation: Manjón-Antolín, Miguel. Universitat Rovira i Virgili. Departamento de Economía; España.