Age-dependent business failures in the US construction industry

Serdar Kale and David Arditi

Construction Management and Economics, 1999, vol. 17, issue 4, 493-503

Abstract: Age-dependent failure in the construction industry is explored over two 11-year periods (1973-1983 and 1984-1994) by analysing the age distribution of failed construction companies in each year and computing age-specific failure probabilities over a 10 year period (1985-1994). The conflicting perspectives of organizational theory are reconciled by taking advantage of the complementary nature of the adaptationist and organizational ecology theories while the effects of the characteristics of the construction industry are also considered. The research findings reveal an age-dependent business failure pattern in the US construction industry where the risk of failure increases initially with increasing age, reaches a peak point and decreases thereafter as companies grow older. Newness of a construction company which implies lack of organizational learning and lack of legitimacy, appears to be the main factor explaining this pattern.

Keywords: Construction Company; Business Failure; Adaptation; Inertia; Learning; Legitimacy (search for similar items in EconPapers)
Date: 1999
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/014461999371411 (text/html)
Access to full text is restricted to subscribers.

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:taf:conmgt:v:17:y:1999:i:4:p:493-503

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RCME20

DOI: 10.1080/014461999371411

Access Statistics for this article

Construction Management and Economics is currently edited by Will Hughes

More articles in Construction Management and Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().