Figure 6.1 Trend in firm population trend per country (indexed, 1996= 1) Source: Constructed from Eurostat SBS database. Firm age Age is measured by deducting the date of incorporation from the year under analysis so that it reflects increase in age as the panel year increases. For example, firms that enter theindustry in 1996 have an age of one year in 1997, two in 1998, and 10 years by 2006. The age ofthe sample firms ranges between 1 and 136. The oldest company is in Germany and in one ofthe large size classes. The mean age is 26 years and higher for medium and small firms. Firm entry Firm entry to theindustry is traced from 'date of incorporation' ofthe firm. On average about 81 firms enter theindustry every year. The higher entry was in 2002 and 2003 when 115 and 111 firms entered theindustry respectively (table 6.2). The highest entry numbers are registered in Italy and France, which is not surprising considering the high total population of firms in these countries. The rate of entry does not show any increasing or decreasing trend. The average size of entrant firms is high in the UK and Germany (appendix 1, table 1). The lowest average size of new entrants is in Italy and France. The Netherlands and Poland are between these two groups of countries. In general the new entrant firms have 112 employees, a €17 m turnover and €8 m in total assets on average. 51
52 Table 6.2 New firm entry (number) per year per country France Germany Italy Netherlands Poland UK Total 1996 15 2 35 3 1 6 62 1997 22 3 42 3 2 8 80 1998 18 2 45 2 9 76 1999 19 3 48 2 4 12 88 2000 14 60 1 2 13 90 2001 16 61 12 89 2002 16 66 3 30 115 2003 19 2 45 3 3 39 111 2004 17 1 41 1 11 71 2005 3 15 2 4 24 Total 159 13 458 14 18 144 806 Source: Eurostat SBS database. Firm exit According to the Amadeus database, firm exits are caused by bankruptcy, merger, liquidation and receivership. Between 2002 and 2006 a total of 172 firms became inactive in the six countries. The Netherlands and Germany have not shown any type of exit in the sample. It means there is no high rate of exit in the population as well. Italy has both a high firm entry and exit. France and the UK are in second place with nearly the same exit number. This result can be attributed to the high competition in these countries, where small and medium firms dominate compared to other countries (except for Poland, which looks concentrated due to data biases). The mean turnover of exiting firms is 30% ofthe mean of incumbents' and the mean total asset of exiting firms is 27% of incumbents'. In terms of mean employment it is about 53% of incumbents' mean employees. Industry concentration To analyse industry concentration we use four-firm concentration ratios (CR4) for France, Germany, Italy, and Poland. A three-firm concentration ratio (CR3) is used for the Netherlands due to data limitations and compared to the Eurostat totals. For the UK no concentration ratio could be calculated due to lack of sales data.