Size, innovation and internationalization: a survival analysis of Italian firms

Abstract

Firms' survival is often seen as crucial for economic growth and competitiveness. This paper focuses on business demography of Italian firms, using an original database, obtained by matching and merging to gain the intersection three firm level datasets. This database allows us to simultaneously consider the effect of size, technology, trade, foreign direct investments, and innovation on firms' survival probability. We show that size and technological level positively affect the likelihood of survival. Internationalized firms show higher failure risk: on average competition is stronger in international markets, forcing firms to be more efficient. However, large internationalized firms are more likely to 'survive'. An Italian internationalized firm to be successful and to survive, should be high-tech, large and innovative.