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Insecurity versus immaturity: estimating the link between organizational age and indirect risks

Author

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  • Ummad Mazhar

Abstract

Purpose - This study explores the role of firm age as a mediating variable in the link between performance and the risk of terrorism. Theoretically, there can be vulnerabilities, liabilities or learning effects associated with age. Design/methodology/approach - The empirical strategy uses randomness in the occurrence of successful terrorist incidents to estimate the hypothesized link in a sample of 1,600 Pakistani firms. Findings - The results suggest a significant effect of terrorism for organizations lying beyond the 50th percentile of the age distribution. In addition to relevant controls – like size, ownership and location effects – the baseline results withstand alternative empirical specifications and the use of instrumental variables. Originality/value - The study helps us understand the role of firm age in its performance, taking into account the presence of risks posed by weak law and order.

Suggested Citation

  • Ummad Mazhar, 2020. "Insecurity versus immaturity: estimating the link between organizational age and indirect risks," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 48(3), pages 616-640, July.
    • Handle: RePEc:eme:jespps:jes-02-2020-0089
    DOI: 10.1108/JES-02-2020-0089
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    Cited by:

    1. Ummad Mazhar, 2021. "Terrorism Risk and the Mediating Role of Manager Experience: Empirical Evidence," Asian Economic Journal, East Asian Economic Association, vol. 35(3), pages 317-337, September.

    More about this item

    Keywords

    Employment growth; Organizational age; Size; Terrorism; Pakistan; D22; F50; L25; L26; M13; P48;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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