Taymaz, Erol [Department of Economics, Middle East Technical University, Ankara Turkey], Ali Güneş [State Institute of Statistics, Ankara Turkey] and Kenan Orhan [State Institute of Statistics, Ankara Turkey]
A revised version of this paper was published in Enrico Santarelli (ed.), Entrepreneurship, Growth, and Innovation: The Dynamics of Firms and Industries, International Studies in Entrepreneurship, March 2006, Vol. 12, Springer [ISBN-10: 0-387-28868-6 / ISBN-13: 978-0-387-28868-0].
Firm and industry dynamics have received considerable attention in recent years. There are numerous theoretical and empirical studies that shed light on the processes of entry, exit, and growth of firms. These studies show that new firms start small, and small and young firms are less likely to survive. In all countries, a large proportion of new firms survive only a few years. We expect that entrepreneurs are also aware of these stylized facts, and take measures that reduce the costs of (potential) exit.....