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The risk of death in newborn businesses during the first years in market.

Authors :
Prieto, Faustino
Sarabia, José María
Calderín-Ojeda, Enrique
Source :
Proceedings of the Royal Society A: Mathematical, Physical & Engineering Sciences; Jul2022, Vol. 478 Issue 2263, p1-16, 16p
Publication Year :
2022

Abstract

In this paper, we analysed how business age and mortality are related during the first years of life, and tested the different hypotheses proposed in the literature. For that, we used data on US business establishments, with 1-year resolution in the range of age of 0–5 years, in the period 1978–2019, published by the US Census Bureau. First, we explored the adaptation of classical techniques of survival analysis (the life table and Peto–Turnbull methods) to business survival analysis. Then, we considered nine parametric probabilistic models, most of them well known in reliability analysis and in the actuarial literature, with different shapes of the hazard function, that we fitted by maximum-likelihood method and compared with the Akaike information criterion. Our findings show that newborn firms seem to have a decreasing failure rate with age during the first 5 years in market, with the exception of the first months of some years in which the risk can rise. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
13645021
Volume :
478
Issue :
2263
Database :
Complementary Index
Journal :
Proceedings of the Royal Society A: Mathematical, Physical & Engineering Sciences
Publication Type :
Academic Journal
Accession number :
158548599
Full Text :
https://doi.org/10.1098/rspa.2021.0952