for example, the yearly exit probability for small firms (fewer than 20 employees) is just under 10%, while it is about 8% for large firms (100 or more employees). Numbers for other countries are similar. Hence, small firms are there to stay. They are not necessarily future large firms (although of course large firms tend to start small), nor are they doomed to disappear quickly. Their presence is not simply due to systematic size differences across industries either, as e.g. Foster et al. (2001) document that within-industry productivity dispersion dominates the productivity dispersion between industries.