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http://ssrn.com/abstract=966242
 
 

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The Impact of Initial Financial State on Firm Duration Across Entry Cohorts


Kim P. Huynh


Government of Canada - Bank of Canada; Indiana University Bloomington - Department of Economics

Robert J. Petrunia


Lakehead University - Department of Economics

Marcel C. Voia


Carleton University

May 25, 2009


Abstract:     
Recent theories of industry dynamics emphasize the role of financial frictions in determining post entry performance of firms. Testing these theories has been difficult because of the lack of financial data on small, young and private firms. Using a unique data set, T2LEAP, this paper considers the survival of new firm in Canadian manufacturing from a financial perspective. Duration analysis quantifies the effects of firm, industry, and aggregate factors. Findings show that nonlinear effects are found with firm leverage. Finally, likelihood decompositions offer insights into the contributing factors to firm hazard for nine entry cohorts.

Number of Pages in PDF File: 39

Keywords: firm exit, duration, leverage, entry cohort

JEL Classification: L11, L60, C41, D92

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Date posted: March 2, 2007 ; Last revised: July 18, 2009

Suggested Citation

Huynh, Kim P. and Petrunia, Robert J. and Voia, Marcel C., The Impact of Initial Financial State on Firm Duration Across Entry Cohorts (May 25, 2009). Available at SSRN: http://ssrn.com/abstract=966242 or http://dx.doi.org/10.2139/ssrn.966242

Contact Information

Kim P. Huynh (Contact Author)
Government of Canada - Bank of Canada ( email )
234 Wellington Street
Ontario, Ottawa K1A 0G9
Canada
Indiana University Bloomington - Department of Economics ( email )
Bloomington, IN 47405-6620
United States

Robert J. Petrunia
Lakehead University - Department of Economics ( email )
Thunder Bay, P7B 5E1
Canada
Marcel C. Voia
Carleton University ( email )
1125 colonel By Drive
Ottawa, Ontario K1S 5B6
Canada
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