Survival and Distinct Exit Routes of New Firms

Masatoshi Kato and Yuji Honjo ()
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Yuji Honjo: Faculty of Commerce, Chuo University

No 101, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This paper explores how the determinants of new-firm duration vary according to exit route: bankruptcy, voluntary liquidation, or merger. Using a sample of new firms in Japan, we provide evidence that the effects of entrepreneur-, firm-, and industry-specific characteristics on new-firm duration are significantly different across exit routes. In particular, the determinants of bankruptcy are fairly different from those of merger. While firms with highly educated entrepreneurs are less likely to go bankrupt, such firms tend to dissolve their businesses voluntarily or be merged by other firms. Our findings suggest that while industry-specific characteristics, such as industry growth and R&D intensity, play a significant role in determining bankruptcy, they do not affect exit through merger.

Keywords: New firm; Survival; Exit; Bankruptcy; Voluntary liquidation; Merger (search for similar items in EconPapers)
JEL-codes: L26 M13 O25 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2013-03, Revised 2013-03
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http://192.218.163.163/RePEc/pdf/kgdp101.pdf First version, 2013 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:101

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