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The Impact Of Initial Financial State On Firm Duration Across Entry Cohorts

Author

Listed:
  • KIM P. HUYNH
  • ROBERT J. PETRUNIA
  • MARCEL VOIA

Abstract

Recent theories of industry dynamics emphasize the role of financial frictions in determining post entry performance of firms. Testing these theories has been difficult because of the lack of financial data on small, young and private firms. Using a unique data set, T2LEAP, this paper considers the survival of new firms in Canadian manufacturing from a financial perspective. Duration analysis quantifies the effects of firm, industry and aggregate factors. Findings show that nonlinear effects are found with firm leverage. Finally, likelihood decompositions offer insights into the contributing factors to firm hazard for nine entry cohorts during the period 1985–1997.

Suggested Citation

  • Kim P. Huynh & Robert J. Petrunia & Marcel Voia, 2010. "The Impact Of Initial Financial State On Firm Duration Across Entry Cohorts," Journal of Industrial Economics, Wiley Blackwell, vol. 58(3), pages 661-689, September.
    • Handle: RePEc:bla:jindec:v:58:y:2010:i:3:p:661-689
    DOI: 10.1111/j.1467-6451.2010.00429.x
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    References listed on IDEAS

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