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The determinants for the survival of firms in the Athens Exchange

  • Ioannis Asimakopoulos

    ()

    (Bank of Greece)

  • Dionysis Lalountas

    (Ministry of Economy and Finance and University of Patras)

  • Costas Siriopoulos

    (University of Patras)

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.

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File URL: http://www.bankofgreece.gr/BogEkdoseis/econbull200810.pdf
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Article provided by Bank of Greece in its journal Economic Bulletin.

Volume (Year): (2008)
Issue (Month): 31 (November)
Pages: 07-30

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Handle: RePEc:bog:econbl:y:2008:i:31:p:07-30
Contact details of provider: Web page: http://www.bankofgreece.gr

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