Firm age dynamics and causes of corporate bankruptcy: age dependent explanations for business failure

Alexander Kücher (), Stefan Mayr, Christine Mitter, Christine Duller and Birgit Feldbauer-Durstmüller
Additional contact information
Alexander Kücher: Institute of Management Control and Consulting, Johannes Kepler University
Stefan Mayr: Institute of Management Control and Consulting, Johannes Kepler University
Christine Mitter: Salzburg University of Applied Sciences
Christine Duller: Institute of Management Control and Consulting, Johannes Kepler University
Birgit Feldbauer-Durstmüller: Institute of Management Control and Consulting, Johannes Kepler University

Review of Managerial Science, 2020, vol. 14, issue 3, No 7, 633-661

Abstract: Abstract Theories of organizational failure predict that reasons for corporate demise may differ by firm age and life cycle stage. However, large-scale empirical studies that investigate the relationship between firm characteristics and specific causes of failure are scarce. This study therefore aims to shed light on firm mortality and firm age by analyzing a unique data set of bankrupt small and medium-sized enterprises. Separate statistical models for individual causes of failure are developed in which the liabilities of age are abstracted and disentangled from liabilities of size and industry specific variables on firm level. In this regard organizational ecology argumentation is integrated with resource-based view reasoning following the call for multi-theoretic approaches in organizational failure research. Results show that different failure causes dominate at specific stages of organizational life as defined by age quartiles. While young and adolescent firms predominantly fail due to internal shortcomings, mature small and medium-sized enterprises struggle more with increased competition and economic slowdowns.

Keywords: Business failure; Firm bankruptcy; Insolvency causes; Resource-based view; Small and medium-sized enterprises; Logistic regression analysis; M20 Business Economics General; L25 Firm Performance: Size; Diversification and Scope; G33 Bankruptcy; Liquidation (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://link.springer.com/10.1007/s11846-018-0303-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:rvmgts:v:14:y:2020:i:3:d:10.1007_s11846-018-0303-2

Ordering information: This journal article can be ordered from
http://www.springer.com/business/journal/11846

DOI: 10.1007/s11846-018-0303-2

Access Statistics for this article

Review of Managerial Science is currently edited by R. Ewert and W. Kürsten

More articles in Review of Managerial Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().