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Survival of the fittest: Tourism Exposure and Firm Survival
Filipe B. Caires
C23 - Models with Panel Data
C55 - Large Data Sets: Modeling and Analysis
L25 - Firm Size and Performance
L83 - Sports; Gambling; Recreation; Tourism
In this paper, we estimate a discrete-time hazard model to study firm survival in the Portuguese Tourism sector. This sector has experienced a remarkable performance over the last decades. When compared to other sectors, tourism firms are more likely to exit: (i) if they are young (less than 10 years of existence); and (ii) if they belong to the lower tail of the firm distribution (i.e. belong to the group of worse performers). Within tourism related sectors, we find that firms whose activities are offered mostly to tourists, such as travel agencies and hotels, are always among the best performers in terms of survival. Moreover, despite of Tourism being one of the most volatile sectors in periods of high uncertainty, results show a higher survival resilience among established tourism associated firms.