Description

This paper analyzes the relationship between probability of survival and plant size. Using information for the Chilean manufacturing industry over the period 1979-1999, we study empirically if small and medium-sized enterprises (SMEs) have reduced their probability of survival over time. Our results do not reveal evidence in this regard. To deepen the analysis, first we study how differences in the exposure of industries to international trade affect the probability of survival. Second, we analyze the relationship between survival and size for 25 industries. Our results suggest that (i) higher exposure to international trade increases the probability of survival of SMEs, and (ii) there is large heterogeneity in the impact of size on survival across manufacturing industries. This evidence casts some doubts regarding support policies for SMEs that do not take into account differences across industries or between medium and small plants.