Innovation, Technological Conditions and New Firm Survival

15 Pages Posted: 10 Dec 2008

See all articles by Paul H. Jensen

Paul H. Jensen

University of Melbourne - Melbourne Institute of Applied Economic and Social Research

Elizabeth Webster

Swinburne University of Technology; University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Hielke Buddelmeyer

Melbourne Institute; IZA Institute of Labor Economics

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Abstract

High neonatal mortality is one of the most salient 'facts' about firm performance in the industrial organisation literature. We model firm survival and examine the relative influence of firm, industry and macroeconomic factors on survival for new vis-à-vis incumbent firms in Australia. In particular, we focus on how the intensity of innovation in each industry relates to firm survival. Our results imply that while new firms thrive in risky and innovative industries, they are also more susceptible to business cycle effects such as changes in the rate of growth of industry profits and the availability of equity finance.

JEL Classification: L16, M13

Suggested Citation

Jensen, Paul H. and Webster, Elizabeth M. and Buddelmeyer, Hielke, Innovation, Technological Conditions and New Firm Survival. Economic Record, Vol. 84, No. 267, pp. 434-448, December 2008, Available at SSRN: https://ssrn.com/abstract=1311546 or http://dx.doi.org/10.1111/j.1475-4932.2008.00509.x

Paul H. Jensen (Contact Author)

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

Elizabeth M. Webster

Swinburne University of Technology ( email )

Cnr Wakefield and William Streets, Hawthorn Victor
3122 Victoria, Victoria 3122
Australia

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

Hielke Buddelmeyer

Melbourne Institute ( email )

161 Barry Street
Level 7
Parkville, Victoria 3010
Australia
+61383442091 (Phone)

HOME PAGE: http://www.melbourneinstitute.com

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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