Peter M. Solar, Vesalius College, Vrije Universiteit Brussel;
Institute of Irish Studies, QueenÕs University of Belfast;
and INRA, Paris Why some firms die and others survive is only imperfectly understood, although such knowledge would be of obvious use in guiding policy toward small businesses and in explaining the dynamics of industrialization. In the last decade or so economists have started to exploit large data sets to investigate the determinants of firm survival and growth. Among economic historians there has been a boom in business history but little systematic study of firm survival that would give a context to the stories of the great firms. This paper reports preliminary results from a study of European flax, hemp and jute spinners in the 19th century. Evidence on the births, deaths and longevity of Irish and Belgian spinners is presented. Flax spinning firms turn out to be quite long lived: contrary to the results of other historical and contemporary studies, few firms disappear during the first five years of their existence and a substantial share survive for 40 years or more. This result may be due to characteristics of the industry, notably its relatively high fixed capital costs, or it may arise from the use of a variety of sources to track firms making for greater accuracy than in previous studies. The survival of individual firms is investigated using probit analysis. The results are largely negative: little of the variation is explained and the only variable which seems to matter is the size of the firm. It is difficult to any effects due to the location of the firm, its age, its degree of vertical integration, or its legal form.