Initial Financial Conditions, Unobserved Heterogeneity and the Survival of Nascent Canadian Manufacturing Firms

Kim Huynh, Robert Petrunia and Marcel Voia
Additional contact information
Robert Petrunia: Lakehead University

Post-Print from HAL

Abstract: The firm dynamics literature has stressed productivity, size, and age effects in firm duration. Understanding the implications of financial state has largely been unexplored because of the lack of quality data on private entrant firms. This paper investigates the role of start‐up financial conditions (debt‐to‐asset ratio) on the duration of entrant manufacturing firms using a unique administrative firm‐level database called T2LEAP. The debt‐to‐asset ratio has an economically and statistically significant effect on firm hazard after controlling for usual covariates and unobserved heterogeneity. Further, a non‐monotonic relationship between firm hazard and leverage appears. Firm hazard varies positively with leverage for firms in the top two leverage quintiles, whereas hazard rates fall with leverage in the lower quintiles. Copyright © 2011 John Wiley & Sons, Ltd.

Date: 2011-12-18
References: Add references at CitEc
Citations:

Published in Managerial and Decision Economics, 2011, 33 (2), pp.109-125. ⟨10.1002/mde.1565⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Initial Financial Conditions, Unobserved Heterogeneity and the Survival of Nascent Canadian Manufacturing Firms (2012)
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:hal:journl:hal-04926630

DOI: 10.1002/mde.1565

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().