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A Survival Analysis of Business Insolvency in ICT and Automobile Industries

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  • Chang-Gyu Yang

    (Department of Management Information, School of Business Administration, Ajou University, Suwon 443-749, Republic of Korea)

  • Silvana Trimi

    (Department of Management, University of Nebraska-Lincoln, Lincoln 68588, USA)

  • Sang-Gun Lee

    (Division of Management Information Systems, Sogang Business School, Sogang University, Seoul 121-742, Republic of Korea)

  • Joon-Sun Yang

    (Division of Management Information Systems, Sogang Business School, Sogang University, Seoul 121-742, Republic of Korea)

Abstract

This study examines the differences in business insolvency between the information and communication technology (ICT) industry and the automobile industry, as well as their sub-categories of manufacturers and service providers, based on survival analysis. The results indicate that, unlike the technology diffusion model, the survival analysis provided clearer explanations on the differences in business solvency among ICT, automobile, manufacturing, and service firms. We found that insolvency of ICT firms is influenced by the short life cycle of the products/services that these firms provide to their customers, as compared to a much longer life cycle of the products of manufacturers. We also identified that ICT service providers’ business depends heavily on ICT manufacturers, but to strengthen their survival ability they must continuously introduce technological innovations. In addition, the study examined the causes of business insolvency of ICT firms based on the characteristics of the ICT industry, including the swing effect, the bandwagon effect, and winner-take-all outcomes. The study results provide valuable insights in developing survival strategies for ICT and automobile firms. The study also makes contributions to the literature in that the business insolvency phenomenon can be better explained through statistical significance analysis.

Suggested Citation

  • Chang-Gyu Yang & Silvana Trimi & Sang-Gun Lee & Joon-Sun Yang, 2017. "A Survival Analysis of Business Insolvency in ICT and Automobile Industries," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 16(06), pages 1523-1548, November.
    • Handle: RePEc:wsi:ijitdm:v:16:y:2017:i:06:n:s021962201550011x
    DOI: 10.1142/S021962201550011X
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