A Survival Analysis of Business Insolvency in ICT and Automobile Industries

Chang-Gyu Yang (), Silvana Trimi, Sang-Gun Lee () and Joon-Sun Yang
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Chang-Gyu Yang: Department of Management Information, School of Business Administration, Ajou University, Suwon 443-749, Republic of Korea
Silvana Trimi: Department of Management, University of Nebraska-Lincoln, Lincoln 68588, USA
Sang-Gun Lee: Division of Management Information Systems, Sogang Business School, Sogang University, Seoul 121-742, Republic of Korea
Joon-Sun Yang: Division of Management Information Systems, Sogang Business School, Sogang University, Seoul 121-742, Republic of Korea

International Journal of Information Technology & Decision Making (IJITDM), 2017, vol. 16, issue 06, 1523-1548

Abstract: This study examines the differences in business insolvency between the information and communication technology (ICT) industry and the automobile industry, as well as their sub-categories of manufacturers and service providers, based on survival analysis. The results indicate that, unlike the technology diffusion model, the survival analysis provided clearer explanations on the differences in business solvency among ICT, automobile, manufacturing, and service firms. We found that insolvency of ICT firms is influenced by the short life cycle of the products/services that these firms provide to their customers, as compared to a much longer life cycle of the products of manufacturers. We also identified that ICT service providers’ business depends heavily on ICT manufacturers, but to strengthen their survival ability they must continuously introduce technological innovations. In addition, the study examined the causes of business insolvency of ICT firms based on the characteristics of the ICT industry, including the swing effect, the bandwagon effect, and winner-take-all outcomes. The study results provide valuable insights in developing survival strategies for ICT and automobile firms. The study also makes contributions to the literature in that the business insolvency phenomenon can be better explained through statistical significance analysis.

Keywords: Business insolvency; ICT industry; survival analysis; business life cycles (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1142/S021962201550011X

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