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http://ssrn.com/abstract=1649732
 
 

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Firm Mortality and Natal Financial Care


Utpal Bhattacharya


Indiana University - Department of Finance

Alexander Borisov


Indiana University - Department of Finance

Xiaoyun Yu


Indiana University - Department of Finance; China Academy of Financial Research (CAFR)

December 24, 2012

Journal of Financial and Quantitative Analysis (JFQA), Forthcoming

Abstract:     
We construct a mortality table for U.S. public companies during 1985–2006. We find that firms’ age-specific mortality rates initially increase, peaking at age three, and then decrease with age, implying that the first three years of public life are critical. Financial intermediaries involved around the public birth of a firm — venture capitalists (VCs) and high-quality underwriters — are associated with lower firm mortality rates, sometimes for up to seven years after the IPO. VCs reduce mortality rates more through natal financial care than through selection, whereas high-quality underwriters affect firm mortality more through selection.

Number of Pages in PDF File: 91

Keywords: firm mortality, survival risk, initial public offerings, underwriters, venture capital

JEL Classification: D21, D53, E32, G24, G33

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Date posted: July 28, 2010 ; Last revised: March 19, 2013

Suggested Citation

Bhattacharya , Utpal and Borisov, Alexander and Yu, Xiaoyun, Firm Mortality and Natal Financial Care (December 24, 2012). Journal of Financial and Quantitative Analysis (JFQA), Forthcoming. Available at SSRN: http://ssrn.com/abstract=1649732 or http://dx.doi.org/10.2139/ssrn.1649732

Contact Information

Utpal Bhattacharya (Contact Author)
Indiana University - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3413 (Phone)
812-855-5875 (Fax)
HOME PAGE: http://www.kelley.iu.edu/ubhattac/
Alexander Borisov
Indiana University - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
Xiaoyun Yu
Indiana University - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3521 (Phone)
812-855-5875 (Fax)
China Academy of Financial Research (CAFR)
1954 Huashan Road
Shanghai P.R.China, 200030
China

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