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THE IMPACT OF INITIAL FINANCIAL STATE ON FIRM DURATION ACROSS ENTRY COHORTS -super-

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  • KIM P. HUYNH
  • ROBERT J. PETRUNIA
  • MARCEL VOIA

Abstract

Recent theories of industry dynamics emphasize the role of financial frictions in determining post entry performance of firms. Testing these theories has been difficult because of the lack of financial data on small, young and private firms. Using a unique data set, T2LEAP, this paper considers the survival of new firms in Canadian manufacturing from a financial perspective. Duration analysis quantifies the effects of firm, industry and aggregate factors. Findings show that nonlinear effects are found with firm leverage. Finally, likelihood decompositions offer insights into the contributing factors to firm hazard for nine entry cohorts during the period 1985-1997. Copyright 2010 The Authors. The Journal of Industrial Economics 2010 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.

Suggested Citation

  • Kim P. Huynh & Robert J. Petrunia & Marcel Voia, 2010. "THE IMPACT OF INITIAL FINANCIAL STATE ON FIRM DURATION ACROSS ENTRY COHORTS -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 58(3), pages 661-689, September.
  • Handle: RePEc:bla:jindec:v:58:y:2010:i:3:p:661-689
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    References listed on IDEAS

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    1. Simona Fabrizi & Steffen Lippert & Pehr-Johan Norbäck & Lars Persson, 2013. "Venture Capitalists and the Patenting of Innovations," Journal of Industrial Economics, Wiley Blackwell, vol. 61(3), pages 623-659, September.
    2. Fabrizi, Simona & Lippert, Steffen & Norback, Pehr-Johan & Persson, Lars, 2007. "Venture Capitalists, Asymmetric Information and Ownership in the Innovation Process," MPRA Paper 6265, University Library of Munich, Germany.
    3. Andrew F. Daughety & Jennifer F. Reinganum, 2013. "Search, bargaining, and signalling in the market for legal services," RAND Journal of Economics, RAND Corporation, pages 82-103.
    4. Bernhard Ganglmair & Luke M. Froeb & Gregory J. Werden, 2012. "Patent Hold-Up and Antitrust: How A Well-Intentioned Rule Could Retard Innovation," Journal of Industrial Economics, Wiley Blackwell, vol. 60(2), pages 249-273, June.
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    Citations

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    Cited by:

    1. Sui, Sui & Yu, Zhihao & Baum, Matthias, 2012. "Prevalence and Longitudinal Trends of Early Internationalisation Patterns among Canadian SMEs," MPRA Paper 41177, University Library of Munich, Germany.
    2. Guimarães Barbosa, Evaldo, 2016. "Determinants of Small Business Survival: The Case of Very Small Enterprises of the Traditional Manufacturing Sectors in Brazil," MPRA Paper 72304, University Library of Munich, Germany.
    3. Lee, Yoonsoo & Mukoyama, Toshihiko, 2015. "Entry and exit of manufacturing plants over the business cycle," European Economic Review, Elsevier, pages 20-27.
    4. Marcel-Cristian Voia & Mihailo Radoman, 2013. "Youth Training Programs and their Impact on Career and Spell Duration of Professional Soccer Players," Carleton Economic Papers 13-01, Carleton University, Department of Economics.
    5. Huynh, Kim P. & Jacho-Chávez, David T. & Kryvtsov, Oleksiy & Shepotylo, Oleksandr & Vakhitov, Volodymyr, 2016. "The evolution of firm-level distributions for Ukrainian manufacturing firms," Journal of Comparative Economics, Elsevier, pages 148-162.
    6. Mohammad M Rahaman, 2016. "Chinese import competition and the provisions for external debt financing in the US," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, pages 898-928.
    7. Masatoshi Kato & Yuji Honjo, 2015. "Entrepreneurial human capital and the survival of new firms in high- and low-tech sectors," Journal of Evolutionary Economics, Springer, pages 925-957.
    8. Olubunmi Ipinnaiye & Declan Dineen & Helena Lenihan, 2017. "Drivers of SME performance: a holistic and multivariate approach," Small Business Economics, Springer, pages 883-911.
    9. repec:spr:izalbr:v:6:y:2017:i:1:d:10.1186_s40172-017-0057-0 is not listed on IDEAS
    10. Yuji Honjo & Masatoshi Kato, 2016. "Do initial financial conditions determine the fate of start-up firms?," Discussion Paper Series 139, School of Economics, Kwansei Gakuin University, revised Jan 2016.
    11. Mihailo Radoman & Marcel C. Voia, 2015. "Youth Training Programs and Their Impact on Career and Spell Duration of Professional Soccer Players," LABOUR, CEIS, vol. 29(2), pages 163-193, June.
    12. Joseph P. Byrne & Marina-Eliza Spaliara & Serafeim Tsoukas, 2016. "Firm Survival, Uncertainty, And Financial Frictions: Is There A Financial Uncertainty Accelerator?," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 375-390, January.
    13. repec:eso:journl:v:47:y:2016:i:2:p:213-245 is not listed on IDEAS

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