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Insecurity versus immaturity: estimating the link between organizational age and indirect risks

Ummad Mazhar ()

Journal of Economic Studies, 2020, vol. 48, issue 3, 616-640

Abstract: Purpose - This study explores the role of firm age as a mediating variable in the link between performance and the risk of terrorism. Theoretically, there can be vulnerabilities, liabilities or learning effects associated with age. Design/methodology/approach - The empirical strategy uses randomness in the occurrence of successful terrorist incidents to estimate the hypothesized link in a sample of 1,600 Pakistani firms. Findings - The results suggest a significant effect of terrorism for organizations lying beyond the 50th percentile of the age distribution. In addition to relevant controls – like size, ownership and location effects – the baseline results withstand alternative empirical specifications and the use of instrumental variables. Originality/value - The study helps us understand the role of firm age in its performance, taking into account the presence of risks posed by weak law and order.

Keywords: Employment growth; Organizational age; Size; Terrorism; Pakistan; D22; F50; L25; L26; M13; P48 (search for similar items in EconPapers)
Date: 2020
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