Innovation, Technological Conditions and New Firm Survival
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.
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Document Type: Research Article
Melbourne Institute of Applied Economic and Social Research; Centre for Microeconometrics; Intellectual Property Research Institute of Australia, University of Melbourne, Melbourne, Victoria, Australia
Melbourne Institute of Applied Economic and Social Research; Centre for Microeconometrics, University of Melbourne, Melbourne, Victoria, Australia; and IZA Bonn
Publication date: December 1, 2008