Understanding The Business Failure Rate
AbstractThe rate of business failures is widely quoted but is little understood. This study reviews the availability and usefulness of data on business failures and discusses the major determinants of fluctuations in the business failure rate. It shows that the age distribution of the population of firms is the largest determinant of failures and that the rate of failure has only a small countercyclical fluctuation. The study documents a substantial decline in the rate of failures between 1962 and 1979 and a smaller increase after 1980. The evidence presented suggests that the long decline is caused by the fall in failure rates in certain states and that part of the increase during the 1980s is due to changes in Dun & Bradstreet's data collection procedures. Copyright 1991 Western Economic Association International.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Contemporary Economic Policy.
Volume (Year): 9 (1991)
Issue (Month): 4 (October)
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- Kapadia, Nishad, 2011. "Tracking down distress risk," Journal of Financial Economics, Elsevier, vol. 102(1), pages 167-182, October.
- Alfred R Nucci, 1996. "Business Failure In The 1992 Establishment Universe Sources Of Population Heterogeneity," Working Papers 96-13, Center for Economic Studies, U.S. Census Bureau.
- James Love, 1996. "The determinants of variations in exit rates," Empirica, Springer, vol. 23(1), pages 107-118, February.
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