The Survival of New Firms: Do Bank Loans at Birth Matter?

Bastié Françoise, Cieply Sylvie and Cussy Pascal
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Bastié Françoise: University of Caen Basse-Normandie, CREM (UMR CNRS)
Cieply Sylvie: University of Caen Basse-Normandie, CREM (UMR CNRS)
Cussy Pascal: University of Caen Basse-Normandie, CREM (UMR CNRS)

Economics Working Paper Archive (University of Rennes & University of Caen) from Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS

Abstract: In this article, we explore the issue of whether the financial conditions into which a firm is born have an effect on its survival chances. After both correction of the omitted variables bias and introduction of time varying covariates, we show two distinctive effects of banking debt on the survival of new firms in function of the time horizon: an insignificant or negative impact of banking debt in the short term (less than 2 years) and a persistently positive effect in the medium term (more than 2 years). Founding financial conditions have long-lasting effects upon survival.

Keywords: Survival; New firms; Banking debt; Screening; Duration. (search for similar items in EconPapers)
JEL-codes: D82 G21 M13 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-ban, nep-bec, nep-com and nep-sbm
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Citations: View citations in EconPapers (1)

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