Heterogeneous Exits: Evidence from New Firms

Masatoshi Kato, 雅俊 加藤 and Yuji Honjo

No 2010-3, CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University

Abstract: This paper explores heterogeneous exits-bankruptcy, voluntary liquidation, and merger-by focusing on new firms. Using a sample of approximately 16,000 firms founded in Japan during 1997-2004, we examine the determinants of new-firm exit according to forms of exit. Regarding industry-specific characteristics, our findings indicate that new firms in capital-intensive and R&D-intensive industries are less likely to go bankrupt. In industries characterized by large amounts of capital and low price-cost margins, new firms are more likely to exit through voluntary liquidation and merger. Region-specific characteristics, such as regional agglomeration and unemployment rate, have significant effects on the hazards of exit, and their effects vary across different forms of exit. Moreover, we provide evidence that firm-specific characteristics, such as the number of employees, and entrepreneur-specific characteristics, such as educational background and age, play significantly different roles in determining each form of exit.

Keywords: New firm; exit; bankruptcy; voluntary liquidation; merger; competing risks proportional hazards model (search for similar items in EconPapers)
Pages: 38 pages
Date: 2010-10
New Economics Papers: this item is included in nep-bec, nep-ent, nep-ino, nep-sbm and nep-ure
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https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/29190/wp2010-3.pdf

Related works:
Working Paper: Heterogeneous Exits: Evidence from New Firms (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitcei:2010-3

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