Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/114707
Authors: 
Watson, John
Everett, Jim
Year of Publication: 
1996
Citation: 
[Journal:] Journal of Entrepreneurial and Small Business Finance [ISSN:] 1057-2287 [Volume:] 5 [Year:] 1996 [Issue:] 3 [Pages:] 271-285
Abstract: 
Results of many previous studies on the rate of small business failure suggest an inverse relationship between size of business and propensity to fail. However, it has been suggested that this inverse relationship, between firm size and the rate of discontinuance, may more accurately be characterized as an inverse relationship between age of business and the rate of discontinuance. While some studies have confirmed the positive association between failure and age, they have generally found that a size effect persists even after controlling for age. The central objective of this study is to show how reported failure rates may depend heavily on the definition of failure adopted, and to examine the proposition that the results of previous studies reporting a negative association between propensity to fail and business size may have been driven by the choice of failure definition.
Subjects: 
Bankruptcy
Mergers
Acquisitions
Failure Rate
JEL: 
G33
L25
G34
Document Type: 
Article

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