Failure rates for new Canadian firms: new perspectives on entry and exit
Abstract
This study investigates the determinants of failure for new
Canadian firms. It explores the role that certain factors play in
conditioning the likelihood of survival - factors related to
industry structure, firm demographics and macroeconomic cycles. It
asks whether the determinants of failure are different for
new start-ups than for firms that have reached adolescence, and if
the
magnitude of these differences is economically significant.
It examines whether, after controlling for certain influences,
failure
rates differ across industries and provinces.
Two themes figure prominently in this analysis. The first is
the impact that certain industry characteristics - such as average
firm
size and concentration - have on the entry/exit process,
either through their influence on failure costs or on the
intensity of
competition. The second centres on how the dimensions of
failure evolve over time as new firms gain market experience.
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1999 |
(PDF - 612K) |
Amended (2004/08/06) |
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