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Firm survival in new EU member states

Eduard Baumohl (), Ichiro Iwasaki () and Evžen Kočenda

Economic Systems, 2020, vol. 44, issue 1

Abstract: We analyze firm survival determinants in four new European Union member states (the Czech Republic, Hungary, Poland and Slovakia). We employ the Cox proportional hazards model on firm-level data for the period of 2006–2015. We show that in all four countries, less concentrated control of large shareholders, higher solvency and more board directors are linked with an increased probability of firm survival. However, an excessive number of board directors has a detrimental effect. Firms with foreign owners and higher returns on their assets exhibit better survival chances. Conversely, across countries and industries, larger firms and those hiring international auditors have lower probabilities of survival. A number of specific determinants influence firm survival in different ways, emphasizing the importance of country and industry differences when studying firm survival. We also document that, in an economic sense, determinants associated with the legal form, ownership structure and corporate governance show the most beneficial effects with respect to firm survival.

Keywords: Firm survival; New EU member states; Survival and exit determinants; Hazards model (search for similar items in EconPapers)
JEL-codes: D22 G01 G33 G34 P34 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
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Working Paper: Firm survival in new EU member states (2019) Downloads
Working Paper: Firm Survival in New EU Member States (2017) Downloads
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DOI: 10.1016/j.ecosys.2020.100743

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