Determinants of firm sustainability in Estonia
This paper examines the determinants of firm sustainability in Estonia using discrete-time survival analysis with a complementary log-log hazard function. A firm is defined as sustainable if it meets the minimum capital requirement set by the law, and if it does not then it is described as being "distressed". The definition of "in default" stipulates that not only must the firm be short of the required capital, but it should also have exited or dropped out altogether. This study confirms the stylized fact that firms face higher risk during their start-up period. Firm distress and default hazard decrease over time, the latter however, non-monotonically being lagged relative to distress. At the industry level, manufacturing firms demonstrate a higher degree of robustness compared to trade and services companies. Most importantly, however, firm sustainability positively depends on efficiency, good stable asset return, low leverage and a large assets base
|Date of creation:||08 Mar 2007|
|Date of revision:||08 Mar 2007|
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References listed on IDEAS
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- 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.
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CERGE-EI Working Papers
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- Karin Jõeveer, 2006. "Sources of capital structure : evidence from transition countries," Bank of Estonia Working Papers 2006-02, Bank of Estonia, revised 12 Nov 2006.
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- Philippe Robert-Demontrond & R. Ringoot, 2004. "Introduction," Post-Print halshs-00081823, HAL. Full references (including those not matched with items on IDEAS)
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