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Business failure of new software firms

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  • Yuji Honjo

Abstract

This paper investigates business failure of newly-established software firms. Using a proportional hazards model, we estimate the determinants of business failure among software firms in Japan founded during 1986-1995. The main findings of this paper are as follows. First, software firms with sufficient size or paid-up capital are less likely to fail. Secondly, vertical integration increases the probability of failure. Thirdly, manager's attributes, such as age, affect the probability of failure. Finally, local agglomeration increases the probability of failure, while macroeconomic growth decreases the probability.

Suggested Citation

  • Yuji Honjo, 2000. "Business failure of new software firms," Applied Economics Letters, Taylor & Francis Journals, vol. 7(9), pages 575-579.
    • Handle: RePEc:taf:apeclt:v:7:y:2000:i:9:p:575-579
    DOI: 10.1080/13504850050059032
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    1. Enrico Santarelli, 1998. "Start-up size and post-entry performance: the case of tourism services in Italy," Applied Economics, Taylor & Francis Journals, vol. 30(2), pages 157-163, February.
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    Cited by:

    1. Otto, Anne & Fornahl, Dirk, 2008. "Long-term growth determinants of young businesses in Germany : effects of regional concentration and specialisation," IAB-Discussion Paper 200813, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Justin Van Der Sluis & Mirjam Van Praag & Wim Vijverberg, 2008. "Education And Entrepreneurship Selection And Performance: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 795-841, December.
    3. Anne Otto & Dirk Fronahl, 2009. "Long-Term Growth Determinants Of Young Businesses In Germany – The Effects Of Regional Concentration And Specialisation," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 3(1), pages 1-35, JUNE.
    4. Canfei He & Rudai Yang, 2016. "Determinants of Firm Failure: Empirical Evidence from China," Growth and Change, Wiley Blackwell, vol. 47(1), pages 72-92, March.

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