Survival determinants for Brazilian companies, 1996 to 2016

This paper examines the survival determinants of small- and medium-sized Brazilian companies from 1996 to 2016. A nonparametric survival model (Kaplan–Meier hazard function) and a semiparametric model (Cox proportional model) were used to study a period larger than the ones in previous studies. Applying these methods to a sample of 43,865 industrial firms, we analyzed survival rates by size, region and technological intensity of companies, in order to understand which elements influenced the survival of firms. Our main findings was that small companies had the lowest survival rates compared to medium and large companies, in all groups of sectors classified by technological intensity. However, for small companies, the highest survival rate of those classified as having medium technological intensity and those located in Northeast region of Brazil stand out. Both are interesting findings because, first, they go against common sense that assumes that participation, growth, and survival of small companies are linked to low technology sectors, and second, that survival is not linked to deep Brazilian regional inequalities. In addition, the semiparametric survival analysis model showed that the variables that best explain the greater probability of survival of Brazilian small- and medium-sized enterprises (SMEs) are presence in less concentrated markets, sectoral growth, productivity levels and presence in sectors with high technological intensity.