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Business failure and change: an Australian perspective

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Author Info

  • Ian Bickerdyke

    (Productivity Commission)

  • Ralph Lattimore

    (Productivity Commission)

  • Alan Madge

    (Productivity Commission)

Registered author(s):

    Abstract

    „h Contrary to common perceptions, most Australian businesses survive for a considerable time ¡V for example, around two¡Vthirds of businesses are still operating after five years and almost one¡Vhalf are still operating after ten years. „h Around 7.5 per cent of businesses exit each year ¡V cessations account for around 80 per cent of exits (changes in ownership account for the remainder) ¡V but most exits are not firm failures. „h Each year, cessations account for, at most, between 9¡V10 per cent of total job losses and 3¡V4 per cent of GDP ¡V however, in net terms, these impacts are outweighed by the corresponding gains from new business start¡Vups. „h Less than 0.5 per cent of businesses exit each year due to ¡¥catastrophic¡¦ failure (bankruptcy or liquidation). The failure rate has fallen significantly in the past decade ¡V the estimated failure rate was 3.6 failures per 1000 enterprises in 1999-00, one¡Vthird of the rate in 1991-92 ¡V the decline is attributable to fewer company liquidations, rather than any fall off in unincorporated business bankruptcies.

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    File URL: http://128.118.178.162/eps/lab/papers/0105/0105002.pdf
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    Bibliographic Info

    Paper provided by EconWPA in its series Labor and Demography with number 0105002.

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    Date of creation: 21 May 2001
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    Handle: RePEc:wpa:wuwpla:0105002

    Note: Type of Document - PDF; prepared on IBM PC; to print on HP;
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    Web page: http://128.118.178.162

    Related research

    Keywords: business failure - small business - business exits - business survival - insolvency - liquidation - bankcruptcy;

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