The potential role of small businesses in job creation is the most visible motivation for the recurring interest in this segment which has prompted investigation into factors that affect business survival. for this size class. The empirical literature, focusing on developed countries, has triggered controversies associated with the problems of measuring and estimating size [see e.g. Davis et al. (1996) and Davidson et al. (1998)]. The data seem to indicate, as expected, that the net job creation effect is likely to be stronger in the services sector. Nevertheless, more recent studies provide convincing evidence of particularly high net job creation by small firms, also in the context of manufacturing, as suggested by Hijzen et al. (2010) and Neumark et al. (2011). Indeed, in addition to the job creation aspect, a well-known stylized fact refers to the high mortality of small businesses a few years after their creation [see Bartelsman et al. (2005)].In this regard, this article examines the survival of small and medium-sized enterprises-SMEs in the Brazilian manufacturing industry. The contributions of the present study reflect two main aspects: (a) The available literature and evidence on SMEs has focused on developed countries. Exceptions include the descriptive study by Najberg et al. (2000), which shows a significant impact on employment of small businesses in Brazil during the period 1995-97 and the growth patterns of small businesses located in Southern Africa, studied by McPherson (1996). However, significant mortality seems to prevail for this segment. Therefore, studying business survival in a large emerging economy like Brazil – characterized by the coexistence of modern and traditional sectors – could be interesting. In fact, the mac...... middle of paper ...... sector specialization and variation in size within the sector. The latter component may reflect, among other factors, economies of scale, minimum efficient scale, and barriers to entry. The authors attempted to disentangle sectoral specialization and intra-sector effects using two approaches with fixed effects estimation and travel share analysis. The most prominent descriptive evidence revealed that relatively similar patterns of industrial dynamics in terms of entry and exit appear to prevail in these countries. In particular, in the majority of cases, around 20% of firms enter and exit most markets each year, while around 20-40% of entering firms fail within the first two years of their life. Although the mentioned study does not consider an econometric study like the one undertaken in this article, its primarily descriptive results can provide useful reference points..