Innovation, Technological Conditions and New Firm Survival

High neonatal mortality is one of the most salient ‘facts’ about firm performance in the industrial organisation literature. We model firm survival and examine the relative influence of firm, industry and macroeconomic factors on survival for new vis‐à‐vis incumbent firms in Australia. In particular...

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Bibliographic Details
Published in:The Economic record 2008-12, Vol.84 (267), p.434-448
Main Authors: JENSEN, PAUL H., WEBSTER, ELIZABETH, BUDDELMEYER, HIELKE
Format: Article
Language:English
Subjects:
Australia
Business cycles
C41
Comparative studies
Enterprises
Industrial organization
Innovation
Innovations
L10
O31
Risk
Startups
Survival
Technological change
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Summary:High neonatal mortality is one of the most salient ‘facts’ about firm performance in the industrial organisation literature. We model firm survival and examine the relative influence of firm, industry and macroeconomic factors on survival for new vis‐à‐vis incumbent firms in Australia. In particular, we focus on how the intensity of innovation in each industry relates to firm survival. Our results imply that while new firms thrive in risky and innovative industries, they are also more susceptible to business cycle effects such as changes in the rate of growth of industry profits and the availability of equity finance.
ISSN:0013-0249
1475-4932
DOI:10.1111/j.1475-4932.2008.00509.x