IDEAS home Printed from https://ideas.repec.org/a/bog/econbl/y2008i31p07-30.html
   My bibliography  Save this article

The determinants for the survival of firms in the Athens Exchange

Author

Listed:
  • Ioannis Asimakopoulos

    (Bank of Greece)

  • Dionysis Lalountas

    (Ministry of Economy and Finance and University of Patras)

  • Costas Siriopoulos

    (University of Patras)

Abstract

This study examines the survival of firms in the Athens Exchange for the period 1993-2006, by applying a number of alternative parametric and non-parametric models. A company is considered not to survive, if its shares have been either under supervision or their trading is suspended for over six months. According to the results, firms characterised by a high degree of debt or by small size or firms that are active in sectors in which new competitors can penetrate easily, run higher risks of non-survival. By contrast, factors such as the corporate governance and the business cycle do not seem to offer a plausible explanation for the probability of non-survival. In addition, it appears that the risk of non-survival is increasing during the first years of a firm's listing in the stock exchange, peaking after approximately 7 years and then decreasing; this suggests that investments in stocks should have a long-term focus.

Suggested Citation

  • Ioannis Asimakopoulos & Dionysis Lalountas & Costas Siriopoulos, 2008. "The determinants for the survival of firms in the Athens Exchange," Economic Bulletin, Bank of Greece, issue 31, pages 07-30, November.
    • Handle: RePEc:bog:econbl:y:2008:i:31:p:07-30
    as

    Download full text from publisher

    File URL: https://www.bankofgreece.gr/BogEkdoseis/econbull200810.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-245, September.
    2. Serguei Kaniovski & Michael Peneder, 2008. "Determinants of firm survival: a duration analysis using the generalized gamma distribution," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 35(1), pages 41-58, March.
    3. Franks, Julian & Mayer, Colin, 2001. "Ownership and Control of German Corporations," The Review of Financial Studies, Society for Financial Studies, vol. 14(4), pages 943-977.
    4. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
    5. Georgios Fotopoulos & Helen Louri, 2000. "Determinants of Hazard Confronting New Entry: Does Financial Structure Matter?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 17(3), pages 285-300, November.
    6. Wruck, Karen Hopper, 1990. "Financial distress, reorganization, and organizational efficiency," Journal of Financial Economics, Elsevier, vol. 27(2), pages 419-444, October.
    7. David Audretsch & Patrick Houweling & A. Thurik, 2000. "Firm Survival in the Netherlands," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 16(1), pages 1-11, February.
    8. Pedro Portugal & José Mata, 2001. "The Survival of New Domestic and Foreign Owned Firms," Working Papers w200101, Banco de Portugal, Economics and Research Department.
    9. Athanasios Tsagkanos & Antonios Georgopoulos & Costas Siriopoulos & Evangelos Koumanakos, 2008. "Identification of Greek Takeover Targets and Coherent Policy Implications," Review of Development Economics, Wiley Blackwell, vol. 12(1), pages 180-192, February.
    10. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    11. Altman, Edward I, 1984. "A Further Empirical Investigation of the Bankruptcy Cost Question," Journal of Finance, American Finance Association, vol. 39(4), pages 1067-1089, September.
    12. Mata, Jose & Portugal, Pedro & Guimaraes, Paulo, 1995. "The survival of new plants: Start-up conditions and post-entry evolution," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 459-481, December.
    13. Shivdasani, Anil, 1993. "Board composition, ownership structure, and hostile takeovers," Journal of Accounting and Economics, Elsevier, vol. 16(1-3), pages 167-198, April.
    14. Baldwin,John R. & Gorecki,Paul With contributions by-Name:Caves,Richard E. With contributions by-Name:Dunne,Tim With contributions by-Name:Haltiwanger,John, 1998. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521633574, September.
      • Baldwin,John R. & Gorecki,Paul With contributions by-Name:Caves,Richard E. With contributions by-Name:Dunne,Tim With contributions by-Name:Haltiwanger,John, 1995. "The Dynamics of Industrial Competition," Cambridge Books, Cambridge University Press, number 9780521465618, October.
    15. Audretsch, David B. & Mahmood, Talat, 1991. "The hazard rate of new establishments : A first report," Economics Letters, Elsevier, vol. 36(4), pages 409-412, August.
    16. Luís M B Cabral & José Mata, 2003. "On the Evolution of the Firm Size Distribution: Facts and Theory," American Economic Review, American Economic Association, vol. 93(4), pages 1075-1090, September.
    17. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    18. Bharat A. Jain & Omesh Kini, 2000. "Does the Presence of Venture Capitalists Improve the Survival Profile of IPO Firms?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 27(9&10), pages 1139-1183.
    19. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer, 1999. "Corporate Ownership Around the World," Journal of Finance, American Finance Association, vol. 54(2), pages 471-517, April.
    20. Richard Whitaker, 1999. "The early stages of financial distress," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 23(2), pages 123-132, June.
    21. Bolton, Patrick & Scharfstein, David S, 1996. "Optimal Debt Structure and the Number of Creditors," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 1-25, February.
    22. Zingales, Luigi, 1994. "The Value of the Voting Right: A Study of the Milan Stock Exchange Experience," The Review of Financial Studies, Society for Financial Studies, vol. 7(1), pages 125-148.
    23. Michael Doumpos & Constantin Zopounidis, 2007. "Model combination for credit risk assessment: A stacked generalization approach," Annals of Operations Research, Springer, vol. 151(1), pages 289-306, April.
    24. Florian Heiss & Jens Köke, 2004. "Dynamics in Ownership and Firm Survival: Evidence from Corporate Germany," European Financial Management, European Financial Management Association, vol. 10(1), pages 167-195, March.
    25. Ch. Spathis & M. Doumpos & C. Zopounidis, 2002. "Detecting falsified financial statements: a comparative study using multicriteria analysis and multivariate statistical techniques," European Accounting Review, Taylor & Francis Journals, vol. 11(3), pages 509-535.
    26. Bunch, David S & Smiley, Robert, 1992. "Who Deters Entry? Evidence on the Use of Strategic Entry Deterrents," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 509-521, August.
    27. Buehler, Stefan & Kaiser, Christian & Jaeger, Franz, 2006. "Merge or fail? The determinants of mergers and bankruptcies in Switzerland, 1995-2000," Economics Letters, Elsevier, vol. 90(1), pages 88-95, January.
    28. Gijoon Hong & Stavros Peristiani, 2004. "Pre-IPO financial performance and aftermarket survival," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 10(Feb).
    29. Panayotis Kapopoulos & Sophia Lazaretou, 2007. "Corporate Ownership Structure and Firm Performance: evidence from Greek firms," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(2), pages 144-158, March.
    30. Opler, Tim C & Titman, Sheridan, 1994. "Financial Distress and Corporate Performance," Journal of Finance, American Finance Association, vol. 49(3), pages 1015-1040, July.
    31. Honjo, Yuji, 2000. "Business failure of new firms: an empirical analysis using a multiplicative hazards model," International Journal of Industrial Organization, Elsevier, vol. 18(4), pages 557-574, May.
    32. Edward I. Altman, 1968. "Financial Ratios, Discriminant Analysis And The Prediction Of Corporate Bankruptcy," Journal of Finance, American Finance Association, vol. 23(4), pages 589-609, September.
    33. Denis, David J. & Sarin, Atulya, 1999. "Ownership and board structures in publicly traded corporations," Journal of Financial Economics, Elsevier, vol. 52(2), pages 187-223, May.
    34. Natália Barbosa & Helen Louri, 2005. "Corporate Performance: Does Ownership Matter? A Comparison of Foreign- and Domestic-Owned Firms in Greece and Portugal," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 27(1), pages 73-102, August.
    35. Bharat A. Jain & Omesh Kini, 2000. "Does the Presence of Venture Capitalists Improve the Survival Profile of IPO Firms?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 27(9‐10), pages 1139-1183, November.
    36. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    37. Audretsch, David B. & Santarelli, Enrico & Vivarelli, Marco, 1999. "Start-up size and industrial dynamics: some evidence from Italian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 17(7), pages 965-983, October.
    38. Randoy, Trond & Goel, Sanjay, 2003. "Ownership structure, founder leadership, and performance in Norwegian SMEs: implications for financing entrepreneurial opportunities," Journal of Business Venturing, Elsevier, vol. 18(5), pages 619-637, September.
    39. Asimakopoulos, Ioannis & Athanasoglou, Panayiotis & Siriopoulos, Konstantinos, 2006. "External financing, growth and capital structure," MPRA Paper 16451, University Library of Munich, Germany.
    40. Edward I. Altman, 1968. "The Prediction Of Corporate Bankruptcy: A Discriminant Analysis," Journal of Finance, American Finance Association, vol. 23(1), pages 193-194, March.
    41. Colin Mayer, 1990. "Financial Systems, Corporate Finance, and Economic Development," NBER Chapters, in: Asymmetric Information, Corporate Finance, and Investment, pages 307-332, National Bureau of Economic Research, Inc.
    42. Rajshree Agarwal & David B. Audretsch, 2001. "Does Entry Size Matter? The Impact of the Life Cycle and Technology on Firm Survival," Journal of Industrial Economics, Wiley Blackwell, vol. 49(1), pages 21-43, March.
    43. Audretsch, David B & Mahmood, Talat, 1995. "New Firm Survival: New Results Using a Hazard Function," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 97-103, February.
    44. Jiatao Li, 1995. "Foreign entry and survival: Effects of strategic choices on performance in international markets," Strategic Management Journal, Wiley Blackwell, vol. 16(5), pages 333-351.
    45. David B. Audretsch & Erik E. Lehmann, 2004. "The Effects of Experience, Ownership, and Knowledge on IPO Survival: Empirical Evidence from Germany," Papers on Entrepreneurship, Growth and Public Policy 2004-20, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    46. Caramanis, Constantinos & Lennox, Clive, 2008. "Audit effort and earnings management," Journal of Accounting and Economics, Elsevier, vol. 45(1), pages 116-138, March.
    47. repec:bla:jfinan:v:53:y:1998:i:1:p:27-64 is not listed on IDEAS
    48. Jensen, Michael C, 1988. "Takeovers: Their Causes and Consequences," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 21-48, Winter.
    49. Silviano Pérez & Amparo Llopis & Juan Llopis, 2004. "The Determinants of Survival of Spanish Manufacturing Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 25(3), pages 251-273, August.
    50. Panayiotis P. Athanasoglou & Ioannis Asimakopoulos G. & Konstantinos Siriopoulos P., 2006. "External Financing, Growth and capital structure of the firms listed on the Athens Exchange," Economic Bulletin, Bank of Greece, issue 26, pages 59-77, January.
    51. Douglas A. Hensler & Ronald C. Rutherford & Thomas M. Springer, 1997. "The Survival Of Initial Public Offerings In The Aftermarket," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 20(1), pages 93-110, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Theodoros M. Mitrakos & George T. Simigiannis, 2009. "The determinants of Greek household indebtedness and financial stress," Economic Bulletin, Bank of Greece, issue 32, pages 7-26, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Silviano Esteve-Pérez & Amparo Sanchis-Llopis & Juan Sanchis-Llopis, 2010. "A competing risks analysis of firms’ exit," Empirical Economics, Springer, vol. 38(2), pages 281-304, April.
    2. Koke, Jens, 2002. "Determinants of acquisition and failure: evidence from corporate Germany," Structural Change and Economic Dynamics, Elsevier, vol. 13(4), pages 457-484, December.
    3. Carlos Carreira & Paulino Teixeira, 2011. "The shadow of death: analysing the pre-exit productivity of Portuguese manufacturing firms," Small Business Economics, Springer, vol. 36(3), pages 337-351, April.
    4. Alexandra Tsvetkova & Jean-Claude Thill & Deborah Strumsky, 2014. "Metropolitan innovation, firm size, and business survival in a high-tech industry," Small Business Economics, Springer, vol. 43(3), pages 661-676, October.
    5. Marcelo Resende & Vicente Cardoso & Luis Otávio Façanha, 2016. "Determinants of survival of newly created SMEs in the Brazilian manufacturing industry: an econometric study," Empirical Economics, Springer, vol. 50(4), pages 1255-1274, June.
    6. Dimara, Efthalia & Skuras, Dimitris & Tsekouras, Kostas & Tzelepis, Dimitris, 2008. "Productive efficiency and firm exit in the food sector," Food Policy, Elsevier, vol. 33(2), pages 185-196, April.
    7. Christos Genakos & Ioannis Kaplanis & Maria Theano Tagaraki & Aggelos Tsakanikas, 2023. "Firm Resilience and Growth during the Economics Crisis: lessons from the Greek depression," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 186, Hellenic Observatory, LSE.
    8. Giulio Bottazzi & Marco Grazzi & Angelo Secchi & Federico Tamagni, 2011. "Financial and economic determinants of firm default," Journal of Evolutionary Economics, Springer, vol. 21(3), pages 373-406, August.
    9. Baumöhl, Eduard & Iwasaki, Ichiro & Kočenda, Evžen, 2020. "Firm survival in new EU member states," Economic Systems, Elsevier, vol. 44(1).
    10. Kimura, Fukunari & Fujii, Takamune, 2003. "Globalizing activities and the rate of survival:: Panel data analysis on Japanese firms," Journal of the Japanese and International Economies, Elsevier, vol. 17(4), pages 538-560, December.
    11. Miguel Manjón-Antolín & Josep-Maria Arauzo-Carod, 2008. "Firm survival: methods and evidence," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 35(1), pages 1-24, March.
    12. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna, 2016. "Inverted-U relationship between R&D intensity and survival: Evidence on scale and complementarity effects in UK data," Research Policy, Elsevier, vol. 45(7), pages 1474-1492.
    13. Christos, Genakos & Kaplanis, Ioannis & Tagaraki, Maria Theano & Tsakanikas, Aggelos, 2023. "Firm resilience and growth during the economics crisis: lessons from the Greek depression," LSE Research Online Documents on Economics 119705, London School of Economics and Political Science, LSE Library.
    14. Helena Persson, 2004. "The Survival and Growth of New Establishments in Sweden, 1987-1995," Small Business Economics, Springer, vol. 23(5), pages 423-440, October.
    15. Raquel Ortega-Argilés & Rosina Moreno, 2005. "Firm Competitive Strategies And The Likelihood Of Survival - The Spanish Case," ERSA conference papers ersa05p347, European Regional Science Association.
    16. Guidi, Francesco & Solomon, Edna & Trushin, Eshref & Ugur, Mehmet, 2015. "Inverted-U relationship between innovation and survival: Evidence from firm-level UK data," EconStor Preprints 110896, ZBW - Leibniz Information Centre for Economics.
    17. FERRAGINA, Anna Maria, 2013. "The Impact of FDI on Firm Survival and Employment: A Comparative Analysis for Turkey and Italy," CELPE Discussion Papers 127, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    18. Elena Cefis & Orietta Marsili, 2005. "A matter of life and death: innovation and firm survival," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 14(6), pages 1167-1192, December.
    19. Masatoshi Kato & Koichiro Onishi & Yuji Honjo, 2017. "Does patenting always help new-firm survival?," Discussion Paper Series 159, School of Economics, Kwansei Gakuin University, revised May 2017.
    20. Colombelli, Alessandra & Krafft, Jackie & Vivarelli, Marco, 2016. "New Firms and Post-Entry Performance: The Role of Innovation," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201602, University of Turin.

    More about this item

    Keywords

    survival models; company delisting;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bog:econbl:y:2008:i:31:p:07-30. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anastasios Rizos (email available below). General contact details of provider: https://edirc.repec.org/data/boggvgr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.