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Post-Entry Struggle for Life and Pre-Exit Shadow of Death from a Financial Perspective.
- Source :
- International Journal of the Economics of Business; Feb2016, Vol. 23 Issue 1, p1-18, 18p
- Publication Year :
- 2016
-
Abstract
- The success or failure of small, young, and private firms depends highly on the evolution of their financial position. This paper considers the post-entry/pre-exit adjustment process of firms, with focus on financial (debt-to-asset ratio) and labor productivity dynamics. Empirically examining financial relationships has been difficult, due to a lack of data on small, young, and private firms. We find that the post-entry struggle for life results in highly productive entrants reducing their leverage. Pre-exit dynamics see firm growth and relative firm size fall, with rising leverage. Increasing leverage hints at ashadow of death. Selection and survivor effects contribute to post-entry dynamics, while turnover and transition effects contribute to pre-exit dynamics. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 13571516
- Volume :
- 23
- Issue :
- 1
- Database :
- Complementary Index
- Journal :
- International Journal of the Economics of Business
- Publication Type :
- Academic Journal
- Accession number :
- 112968565
- Full Text :
- https://doi.org/10.1080/13571516.2015.1084153