The Fallacy of ´Only the Strong Survive´: The Effects of Extrinsic (...)

Julio De Castro ()
Additional contact information
Julio De Castro: Instituto de Empresa

Working Papers Economia from Instituto de Empresa, Area of Economic Environment

Abstract: (WP 07/04 Clave pdf) According to economic theory, under-performing firms should be selected out of the market. However, research shows that these firms persist, often for long periods of time. In this article we explore the non-firm-performance factors that contribute to the decision to persist with an under-performing firm. Using the escalation of commitment literature we identify seven variables that are associated with the persistence decision. We reconcile the economic and psychological views by finding that the extent to which some of these non-firm-performance factors influence the persistence decision is, in part, dependent upon the owner-managers’ level of extrinsic motivation.

Pages: 28 pages
Date: 2004-03
New Economics Papers: this item is included in nep-ent, nep-fmk and nep-hpe
References: Add references at CitEc
Citations:

Downloads: (external link)
http://latienda.ie.edu/working_papers_economia/WP04-07.pdf (application/pdf)

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:emp:wpaper:wp04-07

Access Statistics for this paper

More papers in Working Papers Economia from Instituto de Empresa, Area of Economic Environment Contact information at EDIRC.
Bibliographic data for series maintained by Amada Marcos ( this e-mail address is bad, please contact ).