This paper worked on a sample of 6791 logistics establishments registered in Chengdu, China over the period 1984-2016 to understand the survival status of logistics service providers (LSPs) by non-parametric Kaplan-Meier estimation, together with Cox proportional hazard regression model, to identify factors affecting the failure of LSPs. In particular, it studies the interaction effect between LSPs’ size and entry timing and location. The empirical results show that: 1) Regarding the survival time, 1365 of the 6791 sample LSPs exited from the market by 2017. The exit rate is 20.1%, and the average life of the 6791 LSPs is about 6 years. 2) The survival of LSPs depends on their typology, ownership structure. And there is no significant difference in the probability of survival for both independent LSPs and logistics branches after controlling the effects of other variables. 3) Location and entry timing also play an important role in the survival of small-scale LSPs, but these factors cannot explain large-scale LSPs’ failure.
KeywordsLogistics Service ProvidersSurvival AnalysisKaplan-Meier EstimationCox Proportional Hazard Regression
China State Administration for Industry and Commerce (2013) Analysis Report on the Survival Time of Domestic Enterprises in China. China Development Observation, 28-32.
Manjón-Antolín, M.C. and Arauzo-Carod, J.-M. (2008) Firm Survival: Methods and Evidence. Empirica, 35, 1-24. https://doi.org/10.1007/s10663-007-9048-x
Coad, A. and Guenther, C. (2012) Diversification Patterns and Survival as Firms Mature. Small Business Economics, 41, 633-649. https://doi.org/10.1007/s11187-012-9447-7
Audretsch, D.B., Klomp, L. and Thurik, A.R.R. (1998) Do Services Differ from Manufacturing? The Post-Entry Performance of Firms in Dutch Services. Social Science Electronic Publishing, Rochester.
Gémar, G., Moniche, L. and Morales, A.J. (2016) Survival Analysis of the Spanish Hotel Industry. Tourism Management, 54, 428-438. https://doi.org/10.1016/j.tourman.2015.12.012
Barney, J. (1991) Firm Resources and Sustained Competitive Advantage. Journal of Management, 17, 99-120. https://doi.org/10.1177/014920639101700108
Esteve-Pérez, S. and Manez-Castillejo, J.A. (2008) The Resource-Based Theory of the Firm and Firm Survival. Small Business Economics, 30, 231-249. https://doi.org/10.1007/s11187-006-9011-4
Reimann, B.C. (1982) Organizational Competence as a Predictor of Long Run Survival and Growth. The Academy of Management Journal, 25, 323-334. https://doi.org/10.2307/255994
Klepper, S. (2002) Firm Survival and the Evolution of Oligopoly. The RAND Journal of Economics, 33, 37-61. https://doi.org/10.2307/2696374
Xiao, X., He, W. and Guo, X. (2014) Capacity Accumulation, Expansion Behavior and the Duration of Enterprise Survival: A Study of Enterprise Survival in China’s Strategic Emerging Industries. Management World, 2, 77-89.
Geroski, P. and Schwalbach, J. (1991) Entry and Market Contestability: An International Comparison. Blackwell, Oxford.
Audretsch, D.B. and Mata, J. (1995) The Post-Entry Performance of Firms: Introduction. International Journal of Industrial Organization, 13, 413-419. https://doi.org/10.1016/0167-7187(95)00497-1
Ebert, T., Brenner, T. and Brixy, U. (2018) New Firm Survival: The Interdependence between Regional Externalities and Innovativeness. Small Business Economics, 53, 287-309. https://doi.org/10.1007/s11187-018-0026-4
Josef, B., Peter, P. and Ziegler, R. (1992) Survival Chances of Newly Founded Business Organizations. American Sociological Review, 57, 227-242. https://doi.org/10.2307/2096207
Geurts, K. and Van Biesebroeck, J. (2016) Firm Creation and Post-Entry Dynamics of de Novo Entrants. International Journal of Industrial Organization, 49, 59-104. https://doi.org/10.1016/j.ijindorg.2016.08.002
Zhang, D., Zheng, W. and Ning, L. (2018) Does Innovation Facilitate Firm Survival? Evidence from Chinese High-Tech Firms. Economic Modelling, 75, 458-468. https://doi.org/10.1016/j.econmod.2018.07.030
Chlebicka, A. and Pietrzak, M. (2018) Size of Membership and Survival Patterns of Producers’ Organizations in Agriculture—Social Aspects Based on Evidence from Poland. Sustainability, 10, 2293. https://doi.org/10.3390/su10072293
Geroski, P.A., Mata, J. and Portugal, P. (2010) Founding Conditions and the Survival of New Firms. Strategic Management Journal, 31, 510-529. https://doi.org/10.1002/smj.823
Arcuri, G., Brunetto, M. and Levratto, N. (2018) Spatial Patterns and Determinants of Firm Exit: An Empirical Analysis on France. The Annals of Regional Science, 62, 99-118. https://doi.org/10.1007/s00168-018-0887-0
Lai, K. (2004) Service Capability and Performance of Logistics Service Providers. Transportation Research Part E: Logistics and Transportation Review, 40, 385-399. https://doi.org/10.1016/j.tre.2004.01.002
Wang, C. (2008) Spatial Organizational Network of Logistics Company in China. Acta Geographica Sinica, 63, 135-146.
Strotmann, H. (2006) Entrepreneurial Survival. Small Business Economics, 28, 87-104. https://doi.org/10.1007/s11187-005-8859-z
Wang, C. and Giouvris, E. (2020) Firm Survival between Manufacturing and Non- Manufacturing Industries: Cultural Distance, Country Risk, Entry Mode, Market Size, Firm Age and Location. The Chinese Economy, 53, 412-431. https://doi.org/10.1080/10971475.2020.1730564
Pérez, S.E., Llopis, A.S. and Llopis, J.A.S. (2004) The Determinants of Survival of Spanish Manufacturing Firms. Review of Industrial Organization, 25, 251-273. https://doi.org/10.1007/s11151-004-1972-3
Baumohl, E., Iwasaki, I. and Kocenda, E. (2020) Firm Survival in New EU Member States. Economic Systems, 44, Article ID: 100743. https://doi.org/10.1016/j.ecosys.2020.100743
Iwasaki, I. and Kim, B.-Y. (2020) Legal Forms, Organizational Architecture, and Firm Failure: A Large Survival Analysis of Russian Corporations. European Journal of Law and Economics, 49, 227-275. https://doi.org/10.1007/s10657-020-09644-8
Fotopoulos, G. and Louri, H. (2000) Location and Survival of New Entry. Small Business Economics, 14, 311-321. https://doi.org/10.1023/A:1008180522759
Liu, S., Li, G. and Jin, F. (2018) Quantitative Measurement and Development Evaluation of Logistics Clusters in China. Journal of Geographical Sciences, 73, 1540-1555.
Strale, M. (2019) Logistics Sprawl in the Brussels Metropolitan Area: Toward a Socio-Geographic Typology. Journal of Transport Geography, 88, Article ID: 102372. https://doi.org/10.1016/j.jtrangeo.2018.12.009
Klepper, S. (1996) Entry, Exit, Growth, and Innovation over the Product Life Cycle. The American Economic Review, 86, 562-583.
Mata, J., Portugal, P. and Guimaraes, P. (1995) The Survival of New Plants: Start-Up Conditions and Post-Entry Evolution. International Journal of Industrial Organization, 13, 459-481. https://doi.org/10.1016/0167-7187(95)00500-5
Del Sarto, N., Isabelle, D.A. and Di Minin, A. (2020) The Role of Accelerators in Firm Survival: An fsQCA Analysis of Italian Startups. Technovation, 90-91, Article ID: 102102. https://doi.org/10.1016/j.technovation.2019.102102
Morse, R.P. (2020) Small Business Survival Capabilities and Policy Effectiveness: Evidence from Oakland. National Bureau of Economic Research, Cambridge.
Clottey, T.A. and Grawe, S.J. (2014) Non-Response Bias Assessment in Logistics Survey Research: Use Fewer Tests? International Journal of Physical Distribution & Logistics Management, 44, 412-426. https://doi.org/10.1108/IJPDLM-10-2012-0314
Falk, M. (2013) A Survival Analysis of Ski Lift Companies. Tourism Management, 36, 377-390. https://doi.org/10.1016/j.tourman.2012.10.005
Allison, P.D. (2010) Survival Analysis Using SAS®: A Practical Guide. Second Edition. SAS Institute Inc., Cary.
Li, G., Jin, F., Chen, Y., Jiao, J. and Liu, S. (2017) Location Characteristics and Differentiation Mechanism of Logistics Industry Based on Points of Interest: A Case Study of Beijing. Journal of Geographical Sciences, 72, 1091-1103.
Agarwal, R. and Audretsch, D.B. (2001) Does Entry Size Matter? The Impact of the Life Cycle and Technology on Firm Survival. The Journal of Industrial Economics, 49, 21-43. https://doi.org/10.1111/1467-6451.00136
Mario, C., William, G., Roberto, G.G. and Yulia, V.M. (2010) An Introduction to Survival Analysis Using Stata. Third Edition.
Kleinbaum, D.G. and Klein, M. (2012) Survival Analysis: A Self-Learning Text. Third Edition, Springer-Verlag, Berlin.
Cox, D.R. (1972) Regression Models and Life-Tables. Journal of the Royal Statistical Society Series B Statistical Methodology, 34, 187-220. https://doi.org/10.1111/j.2517-6161.1972.tb00899.x
Kiefer, N.M. (1988) Economic Duration Data and Hazard Functions. Journal of Economic Literature, 26, 646-679.
Audretsch, D.B. and Mahmood, T. (1994) The Rate of Hazard Confronting New Firms and Plants in U.S. Manufacturing. Review of Industrial Organization, 9, 41-56. https://doi.org/10.1007/BF01024218
Grambsch, P.M. and Therneau, T.M. (1994) Proportional Hazards Tests and Diagnostics Based on Weighted Residuals. Biometrika, 81, 515-526. https://doi.org/10.1093/biomet/81.3.515
Ono, Y. (2003) Outsourcing Business Services and the Role of Central Administrative Offices. Journal of Urban Economics, 53, 377-395. https://doi.org/10.1016/S0094-1190(03)00006-8
Hull, C.E., Tang, Z., Tang, J. and Yang, J. (2019) Information Diversity and Innovation for Born-Globals. Asia Pacific Journal of Management, 37, 1039-1060. https://doi.org/10.1007/s10490-019-09651-7
Yuan, Q. (2018) Location of Warehouses and Environmental Justice. Journal of Planning Education and Research. https://doi.org/10.1177/0739456X18786392
Hong, J. (2007) Firm-Specific Effects on Location Decisions of Foreign Direct Investment in China’s Logistics Industry. Regional Studies, 41, 673-683. https://doi.org/10.1080/00343400601120304
Hong, J. (2007) Transport and the Location of Foreign Logistics Firms: The Chinese Experience. Transportation Research Part A. Policy & Practice, 41, 597-609. https://doi.org/10.1016/j.tra.2006.11.004
Liang, S., Cao, Y. and Wu, W. (2013) Spatial Pattern Evolution of Port Logistics Enterprises in Shanghai Metropolitan Area. Geographical Research, 32, 1448-1456.