Paul H. Jensen () (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne) Elizabeth Webster () (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne) Hielke Buddelmeyer (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne and IZA Bonn)
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High neo-natal mortality is one of the most salient ‘facts’ about firm performance in the industrial organization literature. We model firm survival and examine the relative influence of firm, industry and macroeconomic factors on survival for new vis-à-vis incumbent firms. In particular, we focus on how the intensity of innovation in each industry affects firm survival. Our results imply that while new firms, compared with incumbent firms, thrive in risky and innovative industries, they are also more susceptible to business cycle effects such as changes in the rate of growth of aggregate demand, interest rates and the availability of equity finance. JEL Classification: L11, F13, 034
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Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number
wp2006n26.
Length: 25 pages Date of creation: Nov 2006 Date of revision: Handle: RePEc:iae:iaewps:wp2006n26
Contact details of provider: Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia Phone: +61 3 8344 2100 Fax: +61 3 8344 2111 Email: Web page: http://www.melbourneinstitute.com/ More information through EDIRC
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