Selection versus evolutionary adaptation: Learning and post-entry performance

Baldwin, John R.; Rafiquzzaman, Mohammed

doi:10.1016/0167-7187(95)00502-1

Cited by 122 publications

(30 citation statements)

References 7 publications

(3 reference statements)

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“…These findings are mirrored in Jovanovic (1982), Olley and Pakes (1996), Bernard and Jensen (2002), and Melitz (2002), all of whom further suggest that the probability of exit increases as productivity declines. Baldwin and Rafiquzzaman (1995), when considering the survival of a cohort of entrants, find that firms which enter industries at a time of high entry rates are less likely to survive. In modelling exit empirically, it will clearly be important to control of age, size, entry rates, and efficiency.…”

Section: Exitmentioning

confidence: 99%

Firm survival and exit in response to trade liberalization

Baggs

2005

Canadian J of Economics

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This paper considers the implications of changing trade barriers for the survival of Canadian manufacturing firms. The findings suggest that Canadian tariff reductions decreased the probability of survival for Canadian firms while declines in American tariffs increased that probability. Combining these effects, two-thirds of Canadian manufacturing firms saw their probability of survival increase as a result of the tariff reductions mandated by the Canada-US Free Trade Agreement. However, the vulnerability of a firm to failure as a result of trade liberalization was mitigated by the characteristics of that firm, particularly scale and leverage. JEL classification: F1, L1Survie des entreprises et disparition en re´action a`la libe´ralisation du commerce. Ce me´moire examine les impacts de changements dans les barrie`res tarifaires sur la survie des entreprises manufacturie`res canadiennes. Les re´sultats sugge`rent que la re´duction des droits de douane canadiens re´duit la probabilite´de survie des entreprises canadiennes alors qu'une re´duction des droits de douane ame´ricains a l'effet contraire. La combinaison de ces deux effets engendre´s par les re´ductions tarifaires simultane´es commande´es par l'Accord de libre e´change Canada-USA a fait que les 2/3 des entreprises manufacturie`res canadiennes ont vu leur probabilite´de survie s'accroıˆtre. Cependant la vulne´rabilite´de l'entreprise a`la faillite a`cause de la libe´ralisation du commerce est diffe´rente selon les caracte´ristiques de l'entreprise, et en particulier sa taille et sa capitalisation.

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Section: Exitmentioning

confidence: 99%

Firm survival and exit in response to trade liberalization

Baggs

2005

Canadian J of Economics

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“…The effect of concentration on success keeps on being positive and statistically significant too only in distributive sector. This is different to many empirical studies; however, from another angle it may implicitly support the views of Baldwin and Rafiquzzaman (1995) pointing out that entrants could not threaten the existing firms immediately due to smallness and Cincera and Galgau (2005) showing that the time for a new firm to be competitive with incumbents should be five to ten years.…”

Section: Conclusion Implication and Future Researchmentioning

confidence: 72%

The predictability of financial, accounting‐based, and industrial factors on the success of newly incorporated Spanish firms

Tong

Solé

2018

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Purpose: The purpose of this paper is to identify the impacts and predictability of financial, accounting-based, and industrial factors (as well as corporate venturing) on survival-based success of newly incorporated firms in Spain.Design/methodology: Logistic regression is used for comparing the differences of factors in the prediction of future success after different time periods since the studying years (age 1, age 2, and age 3 respectively) in manufacturing and distributive sectors.Findings: Differences in predictability are observed between manufacturing and distributive sectors: it is obvious in distributive sector (rather than manufacturing sector) that liquidity, bank credit, trade credit, and concentration are positively related to success while entry rate is negatively related to success. In spite of that, some factors still show strong predictability in both two sectors. Firm size and profitability are the strongest positive factors, which are followed by corporate venturing and the growth of industrial operating revenues with positive and generally negative relationships to success separately. Besides, for some factors and variables frequently showing statistical significance, their impacts in the same age tend to be relatively stable. Practical implications:The findings of this paper can help to identify the predictability of different factors on the success of newly incorporated firms and catch the differences between manufacturing and distributive sectors.Originality/value: This paper enriches the empirical study of new firm success in Spain in depression and stagnant environment (because the observed years here are from 2009 to 2014); besides, the findings also contribute to the specific prediction study of manufacturing and distributive sectors.

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“…The lender evaluates the density of markets and how the start-ups may enter into markets. Increased concentration implies a higher risk of failure (Baldwin and Rafiquzzaman, 1995). The concentration ratio also may be insignificant for start-ups (e.g.…”

Section: Variablesmentioning

confidence: 99%

Lender evaluations of start-up business prospects

Miettinen

Niskanen

2015

Managerial Finance

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to investigate lender evaluations of start-up success in a sample of Finnish firms that are customers of a state-owned financial institution. The database allows the authors to examine how qualitative information, based on the personal history, firm-specific characteristics, subjective credit-analyst evaluations of business prospects, and market position impact firm performance. Design/methodology/approach -The data for this study was collected in 2003 and 2005 from the database of Finnvera, a state-owned financial institution. The authors employed logistic regression in the analyses, using t-test analyses to describe the sample before developing the different models. Findings -The results suggest that the lenders' evaluations of the business prospects at the start are suitable predictors of good performance. However, the determinants of the actual firm performance (at t5) and business prospects (at t0) are, to some extent, different. The results confirm previous findings indicating that humans display fallibility because they have a tendency to overestimate less relevant cues and, conversely, underestimate the more relevant ones.Research limitations/implications -The study data includes only the customers of a state-owned financial institution; therefore, the results cannot be generalized across other financiers. Another constraint relates to the pre-selection bias, since this data excludes information on loan applicants who were rejected, which was not recorded in the lender's files. Practical implications -The findings of this study provide lenders (especially state-owned financiers), policy makers, and entrepreneurs with clearer guidance regarding the important aspects of a firm's period of establishment. For lenders, this may provide a step toward improving the quality of judgments. Originality/value -This paper is one of the few that sheds light on lender evaluations using non-accounting variables in order to examine their ability to predict firm performance, not failure, and to compare it with lenders' evaluation. Another original contribution is that the data consists of the customers of a state-owned financial institution.

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Selection versus evolutionary adaptation: Learning and post-entry performance

Cited by 122 publications

References 7 publications

Firm survival and exit in response to trade liberalization

Firm survival and exit in response to trade liberalization

The predictability of financial, accounting‐based, and industrial factors on the success of newly incorporated Spanish firms

Lender evaluations of start-up business prospects

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