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Innovation, Technological Conditions and New Firm Survival

Author

Listed:
  • Paul H. Jensen

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Elizabeth Webster

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Hielke Buddelmeyer

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne and IZA Bonn)

Abstract

High neo-natal mortality is one of the most salient ‘facts’ about firm performance in the industrial organization literature. We model firm survival and examine the relative influence of firm, industry and macroeconomic factors on survival for new vis-à-vis incumbent firms. In particular, we focus on how the intensity of innovation in each industry affects firm survival. Our results imply that while new firms, compared with incumbent firms, thrive in risky and innovative industries, they are also more susceptible to business cycle effects such as changes in the rate of growth of aggregate demand, interest rates and the availability of equity finance. JEL Classification: L11, F13, 034

Suggested Citation

  • Paul H. Jensen & Elizabeth Webster & Hielke Buddelmeyer, 2006. "Innovation, Technological Conditions and New Firm Survival," Melbourne Institute Working Paper Series wp2006n26, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2006n26
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    References listed on IDEAS

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    More about this item

    Keywords

    parallel imports; vertical control; intellectual property;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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