A micro-analysis of Irish firm deaths during the financial crisis (2006–2010)

This paper examines differences in the hazard rates of young, established and mature firms during the financial crisis, using microdata from more than 300,000 Irish firms. The findings confirm that firm size at the time of the crisis had the largest impact on the probability of exit. The liability of smallness was pronounced in mature cohorts. Industry conditions had a considerable effect on the hazard rate of young cohorts, as opposed to mature counterparts. Interestingly, agglomeration raised the hazard rates of younger cohorts only. By contrast, attributes of the labour force of the region largely influenced the hazard rates of more established firms. Firms founded before the crisis were significantly less likely to exit in the aftermath of the crisis, in comparison with firms founded just before or during the crisis, whereas more mature firms seem to be more sensitive to the economic cycle.