Firm Survival

This paper investigates the determinants of the survival, between 2001 and 2004, of 622 small firms in England. Seventy one percent of these firms were less than 5 years old in 2001. Prior work by industrial economists has primarily focussed upon factors such as profitability and exit barriers. In contrast, this paper adopts a more managerial approach by examining whether the human capital of the business owner and organisational variables explain survival and non-survival. Our results suggest the founder's education and bank ...

This paper explores how heterogenous risk drives the firm innovation–survival relationship using a large sample of new entrepreneurial firms in China. Results show that innovation increases the probability of survival, although the impact on firm survival is conditioned by the timing of the innovation, the characteristics associated with the innovation strategy, along with the level of risk embodied in the innovation process. Cautious innovators are found to survive longer and contribute to a higher social welfare via gains in firm efficiency. In contrast, risky innovators are less likely to survive, are less efficient, and are only sometimes compensated for their risk in terms of higher profits. Results therefore show that other factors besides higher payoffs force some firms to engage in riskier innovation strategies.

Based on an in-depth case study of Pilkington Plc, this study illustrates that received perspectives in organization theory and theory of the firm fall short of explaining organizational evolution. The framework of organizational evolution developed in this paper is combinatorial in two ways. First, it shows how factors drawn from different perspectives can be combined in understanding organizational evolution. Second,

This study evaluates the relevance of cash flow activities to profitability of manufacturing firms in Nigeria. Whereas the specific objectives were to: Examine the relationship between net cash flow from operating activities and profit for the year of manufacturing firms in Nigeria and Ascertain the relationship between net cash flow from investing activities and profit for the year of manufacturing firms in Nigeria. An ex-post facto was adopted for the study. The adoption of the ex-post facto research design was informed by the fact that the work relied on historical data. The researcher made use of secondary data. The data is Panel data ranging from (2008-2017), there were extracted from the annual reports and accounts of the selected listed manufacturing firms on Nigeria Stock Exchange. E-views 9.0 Software was used to analyzed the data. The result revealed that, net cash flow from operating activities have positive and significant relationship with profit for the year of manufacturing firms in Nigeria between 2008 and 2017. The sign of the correlation coefficient of 0.784528 is positive, and the probability of 0.0000 < 0.05. we conclude that net cash flow from operating activities positively and significantly relate with profit for the year of manufacturing firms. While net cash flow from investing activities has a significant and negative correlation with profit for the year of firms in the manufacturing sector in Nigeria. This implies that increase in net cash flow from investing activities would influence a decrease in profit for the year. The sign of the correlation coefficient of-0.542910 is positive, and the probability of 0.0000 < 0.05. we conclude that net cash flow from investing activities negatively and significantly relate with profit for the year of manufacturing firms. we recommended that Managers of manufacturing firms in Nigeria should engage optimally, all activities that will generate more net cash inflow from operating activities and thoroughly evaluate investment activities to ensure optimal return so as to increase profit for the year of manufacturing firms in Nigeria.

The paper examined the effect of forensic accounting on the performance of Nigerian banking sector. The data were gathered from sample of Guarantee trust bank and Access Bank Plc's annual reports and accounts for (12) twelve years (2006-2017). The research work made use of multiple regression method. Forensic audit (FAUD) was used as proxy for forensic accounting and the dependent variable, net profit margin (NPM), Profit after tax (PAT) and dividend per share (DPS) were used as independent variable using multiple regression technique, E-view 9.0 software package as tool for data analysis. The result of the analysis shows that forensic audit has significant effect on the net profit margin of selected Nigerian banks. It was also observed that forensic audit influences profit after tax of Nigerian banks. The study also revealed that forensic audit has significant effect on retained earnings and dividend per share of Nigerian banks. Based on the findings of this study, the researcher recommends that the management of the commercial banks should emphasize and enhance use of forensic financial information as this will help in increasing the profitability.

This study examines the relevance of earnings management strategies on the financial performance of listed deposit money banks in Nigeria. Data was extracted from the annual report and accounts of 5 sampled banks for the period 2013-2017. Loan loss provision was used as a proxy for earnings management while return on assets (ROA) was used as proxy for banks performance. The study employed linear regression of pooled ordinary lease square for data analysis. Findings from the study revealed that earnings management exist in the Nigerian Money Deposit Banks. However, the study could not establish any statistical significant impact of earnings management on ROA. It is therefore, recommended that even though the relationship between the variables are not significant, proper and adequate measures should be put in place for the evaluation, examination and scrutinization of financial statement of DMBs.

This article describes the benefits and pitfalls of starting a firm with an entrepreneurial team, drawing on a longitudinal empirical analysis of the life course of 90 team start-ups and 1196 solo start-ups in the Netherlands. In the first three years of their existence, team start-ups perform better than solo start-ups on several success indicators. However, after this start phase, entrepreneurial teams face particular problems in realizing further growth. These team-specific bottlenecks can even threaten firm survival. In later life course phases we found a clear distinction between entrepreneurial teams with stagnating growth and teams that succeeded in solving these problems and went on to realize further growth.

W e investigate relationships between operational capabilities and new venture survival. On the basis of operations management and entrepreneurship literature, we develop a contingency framework of operational capabilities especially appropriate at different life phases of a new venture's evolution. We expect that in the first years of a new ven-ture's life, entrepreneurs should emphasize high inventory turnover to preserve working capital, support customer responsiveness, and aid firm adaptability. As new ventures grow, entrepreneurs should emphasize internal working capital generation via larger gross margins to support production ramp-up. Later, new venture entrepreneurs should emphasize employee productivity to buttress sustainable volume production. We analyze a 6-year longitudinal sample of 812 Swedish manufacturing new ventures using a gamma frailty-based Cox regression. The findings show that specific operational capabilities, while always supporting new venture survival, have exceptional influence in specific new venture life phases. The three hypotheses are confirmed, suggesting that higher inventory turnover, gross margin, and employee productivity further increase new venture survival likelihoods, respectively, in the venture's start-up, growth, and stability phases. This suggests a phased-capabilities approach to new venture survival. This study contributes to operations management and entrepreneurship theory and practice, and sets a foundation for future research on operations strategy for new ventures .

Despite foreign and domestic firms have been found to differ on survival and exit risks during crises, we believe that other factors may moderate this foreignness effect, as the technological intensity of the industry. The results show that foreign firms operating in more technology-intensive industries face lower hazards during crises, so the resulting competitive advantage may offset the uncertainty inherent in innovative activities. The conclusions are important for policymakers and managers.

This paper studies the effect of organizational turnover on firm survival within the Dutch accounting service industry during the period 1880-1986. We address three issues: (1) estimating the effect of organizational turnover on organizational dissolution; (2) showing the significance of propinquity in isolating that effect; (3) exposing population dynamics through different levels of analysis. The results of our analysis confirm that turnover is an important endogenous force shaping the evolution of localized populations of organizations. The risk of organizational dissolution increases when turnover entails losses of human and social capital (e.g. long-term owners) and disruption of organizational routines. The results also show that such risk is even higher when organizational members join a competitor or found a new venture within the same geographical area.

Abstract.  Motivated by differences in new-firm survival across regions, this paper explores the impact of regional human capital on new-firm survival rates. New-firm survival is interpreted through formation rates of surviving versus closed firms in the service sector. By incorporating knowledge spillovers through a geographical variation model for Labour Market Areas, we empirically test the relationship between regional human capital stocks and new-firm survival. The expected positive relationship between regional human capital and new-firm survival is supported for the period 1993–1995, but is not as strong for the recession period 1990–1992. Controlling for human capital, the new-firm survival rate is negatively related to service sector specialisation and positively related to all-industry intensity, suggesting that city size and diversity may be an important determinant of new-firm survival in both periods.Abstract.  Motivado por las diferencias entre economías regionales en la supervivencia de nuevas empresas, este artículo explora el impacto del capital humano regional en las tasas de supervivencia de nuevas empresas. La supervivencia de nuevas empresas se interpreta a través de las tasas de formación de empresas supervivientes respecto de empresas que han cerrado en el sector servicios. Mediante la incorporación de spillovers (efectos derrame) de conocimiento en un modelo de variación geográfica para Áreas de Mercado Laboral, analizamos empíricamente la relación entre reservas de capital humano y la supervivencia de nuevas empresas. La esperada relación positiva entre el capital humano regional y la supervivencia de nuevas empresas es válida para el periodo 1993-1995, pero no lo es tanto para el periodo de recesión 1990-1992. Controlando la variable capital humano, la tasa de supervivencia de nuevas empresas esta relacionada negativamente con la especialización del sector servicios y positivamente relacionada a la intensidad del total de industrias, sugiriendo que el tamaño de la ciudad y la diversidad podría ser un factor determinante de la supervivencia de nuevas empresas en ambos periodos.

The liability of smallness assumption suggests that smaller firms face higher exit risks. However, does it apply during crises? We show that during downturns size reduces firms’ exit risk by less. The hazard rate increases more rapidly in size.

ABSTRACT We investigate relationships between operational capabilities and new venture survival. On the basis of operations management and entrepreneurship literature, we develop a contingency framework of operational capabilities especially appropriate at different life phases of a new venture&amp;#39;s evolution. We expect that in the first years of a new venture&amp;#39;s life, entrepreneurs should emphasize high inventory turnover to preserve working capital, support customer responsiveness, and aid firm adaptability. As new ventures grow, entrepreneurs should emphasize internal working capital generation via larger gross margins to support production ramp-up. Later, new venture entrepreneurs should emphasize employee productivity to buttress sustainable volume production. We analyze a 6-year longitudinal sample of 812 Swedish manufacturing new ventures using a gamma frailty-based Cox regression. The findings show that specific operational capabilities, while always supporting new venture survival, have exceptional influence in specific new venture life phases. The three hypotheses are confirmed, suggesting that higher inventory turnover, gross margin, and employee productivity further increase new venture survival likelihoods, respectively, in the venture&amp;#39;s start-up, growth, and stability phases. This suggests a phased-capabilities approach to new venture survival. This study contributes to operations management and entrepreneurship theory and practice, and sets a foundation for future research on operations strategy for new ventures.

Recent reforms in most African economies of their trading and exchange rate regimes have eliminated much of the protection which previously limited competition. Despite these reforms, African manufacturing firms remain unsuccessful, particularly in international export markets. In this paper we consider the roles of learning, competition and market imperfections in determining three aspects of firm performance, namely firm exit, firm