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Learning About Failure: Bankruptcy, Firm Age, and the Resource-Based View

Author

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  • Stewart Thornhill

    (Richard Ivey School of Business, University of Western Ontario, 1151 Richmond St. N., London, Ontario, Canada N6A 3K7)

  • Raphael Amit

    (Management Department, Room 2012 SH-DH, The Wharton School, University of Pennsylvania, 3620 Locust Walk, Philadelphia, Pennsylvania 19104-6364)

Abstract

Systematic differences in the determinants of firm failure between firms that fail early in their life and those that fail after having successfully negotiated the early liabilities of newness and adolescence are identified. Analysis of data from 339 Canadian corporate bankruptcies suggests that failure among younger firms may be attributable to deficiencies in managerial knowledge and financial management abilities. Failure among older firms, on the other hand, may be attributable to an inability to adapt to environmental change.

Suggested Citation

  • Stewart Thornhill & Raphael Amit, 2003. "Learning About Failure: Bankruptcy, Firm Age, and the Resource-Based View," Organization Science, INFORMS, vol. 14(5), pages 497-509, October.
    • Handle: RePEc:inm:ororsc:v:14:y:2003:i:5:p:497-509
    DOI: 10.1287/orsc.14.5.497.16761
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    References listed on IDEAS

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