Abstract

http://ssrn.com/abstract=1768728
 
 

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Factors Affecting Survival, Closure and M&A Exit for Small Businesses


Susan Coleman


University of Hartford - Barney School of Business

Carmen Cotei


University of Hartford - Department of Economics, Finance & Insurance

Joseph Farhat


Central Connecticut State University - Department of Finance

November 1, 2010

Midwest Finance Association 2012 Annual Meetings Paper

Abstract:     
We examine new firms created in 2004 and track their business status in the following four years using the Kauffman Firm Survey data. For firms that exited the sample during the 2004-2008 period, we distinguish between voluntary firm closure in the form of merger or acquisition and compulsory firm closure in the form of failure/permanently closed operations. We apply duration analysis with competing risks to test the effect of owner, business and industry characteristics on firm survival, closure and exit through M&A. The results show that by not taking into account the reason for exit (M&A versus permanently closed operations) we underestimate survival rates. In addition, factors that characterize closed businesses are different from those that characterize businesses that were sold or merged with other businesses.

Number of Pages in PDF File: 49

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Date posted: February 28, 2011 ; Last revised: June 5, 2013

Suggested Citation

Coleman, Susan and Cotei, Carmen and Farhat, Joseph, Factors Affecting Survival, Closure and M&A Exit for Small Businesses (November 1, 2010). Midwest Finance Association 2012 Annual Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1768728 or http://dx.doi.org/10.2139/ssrn.1768728

Contact Information

Susan Coleman
University of Hartford - Barney School of Business ( email )
200 Bloomfield Ave
West Hartford, CT 06117
United States
(860) 768 4690 (Phone)
Carmen Cotei
University of Hartford - Department of Economics, Finance & Insurance ( email )
United States
Joseph Farhat (Contact Author)
Central Connecticut State University - Department of Finance ( email )
1615 Stanley Street
New Britian, CT 06050
United States
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