growth paths and survival chances an application of gambler s ruin theory this paper links new firm survival with growth with a focus on the patterns in firms growth paths we theorise a gambler s ruin framework by arguing that new firm performance is best modelled as a random walk process but that survival is nonrandom and depends primarily on the stock of accumulated resources a firm s resources are either there when the business begins or are generated by successful periods wins the empirical section tracks over six years the sales and survival non survival of 6247 uk start ups which all began trading in the same quarter of 2004 we do not find strong evidence in favour of a taxonomy of growth paths because we observe that every possible growth path seems to occur with roughly equal probability however we observe that growth paths influence subsequent survival controlling for lagged size we observe that longer lags of growth and even start up size have significant effects on survival

spatial competition with free entry chamberlinian tangencies and social efficiency abstract free entry in loschian spatial competition leads to a tangency between each firm s negatively sloped average revenue and the downsloping portion of average costs as in chamberlin s monopolistic competition it is generally concluded that this equilibrium involves too many inefficiently small firms however this conclusion is incorrect the difference between price and firm marginal production costs in spatial equilibrium is just sufficient to cover the additional marginal cost of output resulting from availability of multiple locations this chamberlinian tangency does not imply inefficiency because it does not include all the social costs and benefits resulting from spatial competition

the impact of the financial crisis on new firm registration the authors use panel data on the number of new firm registrations in 95 countries to study the impact of the business environment and 2008 financial crisis on new firm registration the data show that more dynamic formal business creation occurs in countries that provide entrepreneurs with a stable legal and regulatory regime fast and inexpensive business registration process more flexible employment regulations and low corporate taxes the data also show that nearly all countries experienced a sharp drop in business entry during the crisis this drop is more pronounced in countries with higher levels of financial development and countries more affected by the crisis

origin of alliance portfolios entrepreneurs network strategies and firm performance alliance portfolios are ubiquitous and influential for firm performance extant research addresses attributes of high performing alliance portfolios but not how executives originate such portfolios

cross border banking credit access and the financial crisis abstract we study the sensitivity of credit supply to bank financial conditions in 16 emerging european countries before and during the financial crisis we use survey data on 10 701 applicant and non applicant firms that enable us to disentangle effects driven by positive and negative shocks to the banking system from demand shocks that may vary across lenders we find strong evidence that firms access to credit was affected by changes in the financial conditions of their banks during the crisis firms were more credit constrained if they were dealing with banks that experienced a decline in equity and tier 1 capital as well as losses on financial assets we also find that access to credit reflects the balance sheet conditions of foreign parent banks the effect of positive and negative shocks to a bank is greater for riskier firms and firms with fewer tangible assets

marketing strategies that make entrepreneurial firms recession resistant abstract the recession of 1990 1991 adversely affected nearly every industry in the united states and entrepreneurial manufacturing firms were among those hardest hit by the recession the failure rate among this group by mid year 1991 had risen 37 from the previous year thus recessions pose a serious threat to the survival of entrepreneurial firms understanding how the business cycle influences performance and what strategies are effective in such turbulent times has practical value for managers of entrepreneurial firms in this paper we report a large scale empirical research study involving subjective and financial information from 118 publicly traded u s manufacturing firms the participating firms are involved in technologically demanding and highly innovative industry segments industrial and computer equipment electrical equipment and components and measuring analysis and control instruments none of the firms has achieved a market share of more than one half of one percent we find that in these industries a company s marketing strategies preceding a recession strongly impact the extent of economic downturn on the firm and influence its odds of a timely and complete recovery our specific prescriptions follow first maintain marketing activities in the core business as assurance against recession increasing sales and advertising increasing breadth of production and increasing geographic coverage improve performance during both the peak and the contraction of the business cycle second during the peak period cautiously expand with an emphasis on marketing efficiency increasing the number of channels of distribution and cutting price have a negative effect unless accompanied by sales force performance measurement a simple emphasis on incentives and efficiency alone hurts a firm as a recession hits all of these prescriptions run counter to existing views that suggest that recession simply requires cutbacks and retrenchment recessions seem to be different from other threats to firm viability and marketing activities appear to help pull the firm through a macroeconomic downturn

legitimating first organizing activities and the survival of new ventures abstract the process by which firm founders create new organizations is of considerable interest to evolutionary theorists and entrepreneurship researchers this article tracks the life histories of 223 swedish new ventures started between january and september 1998 by a random sample of firm founders we explore the effect of legitimating activities on the hazard of disbanding and the transition to other firm organizing activities during their first 30 months of life we find that undertaking activities to generate legitimacy reduces the hazard of venture disbanding and facilitates the transition to other organizing activities

flexible mixture distribution modeling of dichotomous choice contingent valuation with heterogenity abstract this paper considers the performance of a model of mixture normal distributions for dichotomous choice contingent valuation data which allows the researcher to consider unobserved heterogeneity across the sample the model is flexible and approaches a semi parametric model since the normality assumption can be removed by augmenting the number of mixture distributions bayesian inference allows for simple estimation of the model and is particularly appropriate for conducting inference with finite data sets the proposed model is compared with other semi parametric and parametric approaches using monte carlo simulation under alternative assumptions regarding heteroskedasticity and heterogeneity in sample observations it is found that the mixture normal model reduces bias and improves performance with respect to an alternative semi parametric model particularly when the sample is characterized by heterogeneous preferences the application of the model to empirical data on the recreational value of natural areas in the canary islands confirmed the expected results

relation of dominant problems to stages of growth in technology based new ventures two studies investigating the growth patterns of new ventures are presented in the first study a stage of growth model theorized to apply specifically to technology based new ventures was develop

learning about the unknown how fast do entrepreneurs adjust their beliefs this paper seeks to measure the extent to which entrepreneurs adjust their beliefs in the light of new information instead of relying on past experience to guide their decision making we build a model in which entrepreneurs continually receive valuable but noisy market signals about the true but unobserved productivity of their effort and use this information to update their expectations of unobserved productivity the model is estimated using a sample of over 700 self employed britons interviewed in 1999 and 2000 it is found that on average these individuals adjust their expectations of unobserved productivity in the light of new information by only 16 this suggests that while entrepreneurs do exploit new information they give much greater weight to their prior beliefs when forming their expectations also there are no significant differences in terms of expectation formation between males and females employers and non employers and experienced and less experienced entrepreneurs however younger entrepreneurs respond significantly more sensitively to new information than older entrepreneurs do with adjustment rates of 21 compared with 14 respectively we go on to discuss some policy implications of these findings and briefly discuss several features of entrepreneurship education programs that might help entrepreneurs improve this aspect of their business performance

profit maximizing vs optimal behavior in a spatial setting summary and extensions there exists a rapidly growing body of literature concerning the behavior of firms in a spatial setting to a large extent this work has involved discovering the relationships among monopoly competitive and optimal welfare maximizing behavior in the present paper several aspects of these relationships are discussed the first section presents the underlying assumptions the second summarizes the comparisons that have been made between optimal behavior and various types of profitmaximizing behavior in addition the welfare effect of allowing spatial competitors to earn positive profits is discussed the third section of the paper turns from optimality to efficiency here the efficiency of profit maximizing behavior in a spatial setting is evaluated the last section turns to the question of defining social welfare the effect of the type of welfare function on the distribution of welfare among individuals is examined

founded in adversity operations based survival strategies of ventures founded during a recession abstract we examine the survival of 404 new ventures founded during the 2008 recession we find that industry explains a significant but small percentage of variance in survival 2 81 percent and therefore focus on which operations related actions could enhance ventures odds of survival we find marginally significant support for our hypotheses that a venture founded during a recession is more likely to survive if it increases its production efficiency increases both its production efficiency and variable costs or increases both its production efficiency and fixed costs in property plant and equipment our findings demonstrate that operational decisions are key determinants of survival for ventures founded during a recession

inventory investment over the business cycle in the eu and the us abstract this paper investigates the business cycle properties of aggregate inventory investment in the countries of the european union eu and the us given the experience of the latest recessions this issue becomes particularly interesting for the study of the propagation mechanism of business cycles the kydland prescott methodology was used to derive and organize the business cycle features the results showed that business cycle fluctuations in the eu are more volatile than those in the us the contribution of the declines of inventory investment in recessions has also been greater in the eu important similarities though were identified as to the extent of the destabilizing effect of inventory investment cycles in the overall economic activity

multivariate mixed proportional hazard modelling of the joint retirement of married couples we analyse the joint distribution of the durations until retirement of danish husbands and wives we estimate a multivariate mixed proportional hazards model that allows for interdependence in the times to retirement of spouses we find evidence of strong complementarities in leisure times symmetrically for husband and wife low own income and poor health are found to induce individual retirement prior to spouse s retirement whereas low spousal income is not and neither party is found likely to substitute own for purchased care when the spouse is in poor health furthermore high wealth and low income are found to spur joint simultaneous retirement copyright 2004 john wiley sons ltd

comparative performance of spatial models of economic markets with linear household demand a fundamental precept of the traditional theory of economic markets holds that price competition among firms within the model of perfect competition maximizes economic welfare it follows that the establishment of monopolies or oligopolies will result in reduced economic welfare when compared with a perfectly competitive equilibrium however with scattered buyers and positive transportation cost paid by these buyers the demand curve facing each individual firm is necessarily downward sloping and perfect competition is no longer viable 2 furthermore these circumstances in combination with declining average cost warrant the use of spatial models of economic markets it is the purpose of this paper to examine various spatial models and to compare their impact on economic welfare bringing into question the robustness of traditional economic theory holahan 11 concludes that in the spatial context a multiplant monopolistic equilibrium is superior to a competitive equilibrium in high density areas the spatial competitive model employed by holahan has been widely accepted as the standard spatial representation of competitive behavior this model developed by l6sch 13 and further refined by mills and lay 14 and beckmann 1 2 is based on the assumption that in the short run each firm s market area is fixed the implication of this assumption is that all price changes are undertaken uniformly across all firms within the market presumably price changes are undertaken in unison due either to collusion or price leadership the competitive nature of the l6schian model is evident only in the long run as free entry is assumed to prevail capozza and van order 5 have demonstrated that the loschian model is just one particular type of a class of spatial models compatible with free entry each of these

semi parametric discrete choice measures of willingness to pay abstract a semi parametric discrete choice method is proposed to recover welfare measures from individual choice data the proposed method is compared with the traditional binary choice models in an application to measure benefits of recreation trips

contingent valuation and social choice the contingent valuation method for estimating the existence value of natural resources is examined for psychophysical robustness statistical reliability and economic sensibility extensions of standard models for willingness to pay and suitable econometric techniques for analyzing these models are developed the analysis is applied to a series of experiments on the value of preserving wilderness areas in the western united states the results call into question the reliability of the cv method for estimating existence values

the contribution of large and small employers to job creation in times of high and low unemployment we document a negative correlation at business cycle frequencies between the net job creation rate of large employers and the level of aggregate unemployment that is much stronger than for small employers the differential growth rate of employment between initially large and small employers has an unconditional correlation of 0 5 with the unemployment rate and varies by about 5 percent over the business cycle we exploit several datasets from the united states denmark and france both repeated cross sections and job flows with employer longitudinal information spanning the last four decades and several business cycles we discuss implications for theories of factor demand jel d22 e23 e32 j23 l25

measurement of input specific productivity growth with an application to the construction industry in spain and portugal abstract decision making in companies requires an assessment of the efficiency and productivity of individual inputs to provide insights into the scope for improvement of inputs use this paper estimates an input specific luenberger productivity growth indicator that can be decomposed to identify the contributions of input specific technological change technical efficiency change and scale efficiency change these components for a specific input sum up to the aggregated indicators which are then compared with the traditional luenberger indicator the application focuses on panel data of spanish and portuguese construction firms over the period 2002 2011 accounting for three inputs materials labor and capital the results show that aggregated productivity change and its components computed from the input specific productivity indicator are different from those obtained using a traditional approach the results also indicate that productivity change is negative for labor and capital for construction firms in both spain and portugal while productivity change of materials is positive for portugal and negative for spain productivity decline is worse for capital in the spanish construction firms and for labor in portugal

a semiparametric distribution for willingness to pay and statistical inference with dichotomous choice contingent valuation data this paper proposes a semiparametric willingness to pay distribution and discusses several aspects of statistical inference with dichotomous choice contingent valuation data we study likelihood based estimation of the model parameters with and without controlling for unobserved heterogeneity estimation of the mean and median willingness to pay and specification tests these statistical procedures are implemented using a data set in this application we find that a parametric model is rejected in favor of our semiparametric model that the heterogeneity can be adequately controlled using a simple density and that the semiparametric model offers more robust mean willingness to pay estimates