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Article
Publication date: 28 February 2019

Bernardí Cabrer-Borrás, Paz Rico Belda and Dolores Botella Carrubi

The purpose of this paper is to analyse the determinants of the survival of Spanish companies.

Abstract

Purpose

The purpose of this paper is to analyse the determinants of the survival of Spanish companies.

Design/methodology/approach

Two approaches are used and they are complementary. The first approach analyses the determinants of survival probability. For this purpose, a binary choice model is built and estimated using a sample of companies from the main economic sectors taken from the SABI database. Likewise, the Blinder–Oaxaca decomposition is applied to quantify the difference between companies with employees and without employees and the proportion of this difference that owes to observed factors or unobserved factors. Finally, the second approach is a survival analysis carried out through the Cox proportional hazard model that identifies the determinants of the duration of business activity.

Findings

The results of the empirical analysis show that companies without employees present less favourable conditions for survival at all stages of their evolution than companies with employees.

Originality/value

The contribution of this study to the empirical literature consists in analysing the difference between companies with and without employees. Due to the structure of Spanish companies, this aspect and the determinants of such difference are essential for policymakers to increase the survival for companies.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 25 no. 8
Type: Research Article
ISSN: 1355-2554

Keywords

Book part
Publication date: 9 December 2013

Joseph Blasi, Douglas Kruse and Dan Weltmann

Using a population study, we provide evidence on the important but understudied issue of company survival under employee ownership, as well as on the performance effects…

Abstract

Purpose

Using a population study, we provide evidence on the important but understudied issue of company survival under employee ownership, as well as on the performance effects of employee ownership and the issue of whether employee ownership substitutes for other pension benefits.

Design/methodology/approach

Company survival and pension benefits are assessed using a unique dataset from Dun & Bradstreet of privately held Employee Stock Ownership Plan (ESOP) companies over the 1988–1999 period, matched to non-ESOP companies in the same industry. Performance is assessed using pre/post-comparisons of ESOP adopters in the 1988–1994 period.

Findings

Privately held ESOP companies in 1988 were only half as likely as non-ESOP firms to go bankrupt or close over the 1988–1999 period, and only three-fifths as likely to disappear for any reason. The ESOP companies had significantly higher post-adoption annual employment and sales growth, along with higher sales per employee. ESOP companies are four times more likely than their non-ESOP pairs to have defined benefit pension plan and other forms of defined contribution plans.

Research implications

The greater survival was not explained by higher productivity, or by greater compensation flexibility. The higher survival may instead be tied to complementary policies adopted along with ESOPs to create a more committed and engaged workforce that contributes ideas to enhance survival and is more flexible when economic difficulties arise. The pension results are consistent with other studies on compensation under employee ownership, suggesting that employee ownership is generally used as a form of efficiency wage to provide above-market compensation.

Social implications

Higher survival among ESOP companies could result in lower job loss and unemployment, potentially providing a public policy rationale for support of employee ownership.

Originality/value

The chapter provides the first examination of company survival in privately held ESOP companies, and one of the few examinations of how ESOPs relate to other pension benefits.

Details

Sharing Ownership, Profits, and Decision-Making in the 21st Century
Type: Book
ISBN: 978-1-78190-750-4

Keywords

Article
Publication date: 23 March 2022

Wanyi Chen, Rong Jin and Yuchuan Xie

The rising uncertainties in the macroeconomic environment exacerbate the challenges firms face in the export market. This study aims to explore which strategy is suitable…

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Abstract

Purpose

The rising uncertainties in the macroeconomic environment exacerbate the challenges firms face in the export market. This study aims to explore which strategy is suitable for export enterprises to develop sustainably under COVID-19.

Design/methodology/approach

Based on the sample data of China’s A-stock listed manufacturing firms from 2010 to 2020, this study applies a survival analysis method to explore the impact of strategic flexibility on export firm survival. Furthermore, this study uses the difference-in-difference model to test the relationship between strategic flexibility and firms’ profits in the context of the pandemic.

Findings

The results show that strategic flexibility can increase firms’ survival time, improving dynamic production and innovation capabilities, which is favorable for their sustainable development. Meanwhile, after the spread of COVID-19, firms with strategic flexibility have higher profits than those without. This influence mechanism mainly involves exploring new markets that can improve the company revenue and the coordination capabilities of the supply chain; this reduces corporate costs.

Originality/value

This study expands relevant research on the factors affecting the survival of export enterprises and supplements research on the economic consequences of firms’ strategic flexibility; this also enriches the dynamic capability theory. Additionally, it provides important implications for firms to enhance strategic flexibility and recommends government implementation of policies that encourage the domestic sales of commodities originally produced for exports under COVID-19.

Details

Chinese Management Studies, vol. 17 no. 2
Type: Research Article
ISSN: 1750-614X

Keywords

Book part
Publication date: 6 July 2004

Rhokeun Park, Douglas Kruse and James Sesil

Research on employee ownership has focused on questions of productivity, profitability, and employee attitudes and behavior, while there has been little attention to the…

Abstract

Research on employee ownership has focused on questions of productivity, profitability, and employee attitudes and behavior, while there has been little attention to the most basic measure of performance: survival of the company. This study uses data on all U.S. public companies as of 1988, following them through 2001 to examine how employee ownership is related to survival. Estimation using Weibull survival models shows that companies with employee ownership stakes of 5% or more were only 76% as likely as firms without employee ownership to disappear in this period, compared both to all other public companies and to a closely matched sample without employee ownership. While employee ownership is associated with higher productivity, the greater survival rate of these companies is not explained by higher productivity, financial strength, or compensation flexibility. Rather, the higher survival is linked to their greater employment stability, suggesting that employee ownership companies may provide greater employment security as part of an effort to build a more cooperative culture, which can increase employee commitment, training, and willingness to make adjustments when economic difficulties occur. These results indicate that employee ownership may have an important role to play in increasing job and income security, and decreasing levels of unemployment. Given the fundamental importance of these issues for economic well being, further research on the role of employee ownership would be especially valuable.

Details

Employee Participation, Firm Performance and Survival
Type: Book
ISBN: 978-0-76231-114-9

Article
Publication date: 10 April 2017

Sophie Pommet

The purpose of this paper is to analyze the impact of venture capital (VC) involvement on the survival rate of French initial public offerings (IPOs) during the period…

Abstract

Purpose

The purpose of this paper is to analyze the impact of venture capital (VC) involvement on the survival rate of French initial public offerings (IPOs) during the period 1996-2006. The paper examines the link between the survival rates of IPO companies, and several proxies for the quality of venture capitalist financing and monitoring.

Design/methodology/approach

To analyze the impact of the involvement of VC on both long and short run post-IPO survival, two methods are used: survival analysis (the Cox proportional hazard), and a logit model.

Findings

This paper shows that the quality of venture capitalist monitoring, measured by the duration of their investment before the IPO, is positively correlated with company survival rates. However, the author does not find the expected result when the author considers the experience of venture capitalists measured by their age.

Research limitations/implications

The findings are limited to a sample of VC-backed companies that went public.

Practical implications

The findings have implications for entrepreneurs. When analyzing the advantages and disadvantages linked to the presence of VC firms in the capital of their companies, entrepreneurs should consider that certain types of venture capitalists might be more or less able to be involved in the monitoring and value adding process.

Originality/value

To date, there is no comprehensive study on the French IPO market analyzing both long and short run post-IPO survival of VC-backed companies. This paper fills this gap.

Details

Managerial Finance, vol. 43 no. 4
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 8 March 2022

Yan Zhou, Sangmoon Park, Qifeng Wang, Justin Zuopeng Zhang and Abhishek Behl

Bike-sharing is popular worldwide, and it has led to a new development direction in green transportation. However, the collapse of many bike-sharing startups and residual…

1738

Abstract

Purpose

Bike-sharing is popular worldwide, and it has led to a new development direction in green transportation. However, the collapse of many bike-sharing startups and residual social problems has brought about contradictions and challenges to the development of the industry. The purpose of this paper is to determine how internal factors affect the survival of bike-sharing startups.

Design/methodology/approach

The authors used binary logit regression as the measurement model to conduct an empirical analysis based on 137 bike-sharing startups in China. The study focuses on using traditional theoretical evidence and considers the uniqueness of the industry to jointly explore the survival factors that influence the emerging business model of bike-sharing.

Findings

The results show that entrepreneurial team size and differentiation strategy positively influence survival. Founder-CEOs have a negative impact on survival. Founders' entrepreneurial experience and venture capital have no significant influence on survival.

Originality/value

The results verify the role of traditional survival factors in the new business model of sharing economy and fill the research gap on the survival strategy of startups. This study offers a unique perspective for researchers to better understand the sharing economy industry and provides practical guidance for entrepreneurs and investors to enter the market.

Details

Kybernetes, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 19 October 2021

Dimitrios Chatzoudes, Prodromos Chatzoglou and Anastasios Diamantidis

Looking back on the last 12 years, the whole planet went through two major economic crises (2008 and 2019), which both had a profound impact on the survival of businesses…

Abstract

Purpose

Looking back on the last 12 years, the whole planet went through two major economic crises (2008 and 2019), which both had a profound impact on the survival of businesses. The present study aims to develop and empirically test a conceptual framework that investigates the factors that have an influence on firm survival. More specifically, the study proposes a three-dimensional framework that includes performance drivers (utilizing resource-based view [RBV] factors), performance measures and the measurement of firm survival. Such a multi-dimensional approach has very rarely been explored in the existing literature.

Design/methodology/approach

A thorough literature review revealed gaps in the literature and offered the basis for developing the proposed conceptual framework of the study. Its empirical examination (hypothesis testing) was conducted with the use of a newly developed structured questionnaire that was distributed to a group of Greek manufacturing organizations (the final sample consists of 364 manufacturing companies). Empirical data were analyzed using the “structural equation modeling” (SEM) technique (multivariate analysis) and other similar techniques (i.e. exploratory factor analysis and analysis of variance). The study is empirical (based on primary data), explanatory (examines cause and effect relationships), deductive (tests research hypotheses) and quantitative (includes the analysis of quantitative data collected with the use of a structured questionnaire).

Findings

On the one hand, empirical results point out that “manufacturing-marketing alignment,” “manufacturing capabilities,” “structural configuration” and “business performance under crisis” have the most significant impact and on short-term survival (current situation). On the other hand, “competitive advantage” and “business performance under crisis” have the most significant impact on long-term survival (future situation). Focusing on RBV factors, only “structural configuration” and “manufacturing capabilities” directly affect short-term survival, while “manufacturing–marketing alignment” has an indirect effect on the same factor. Then again, all RBV factors indirectly affect long-term survival. Also, it is confirmed that short-term survival strongly affects long-term survival.

Originality/value

The present study contributes to the debate concerning the antecedents of firm survival, since current empirical findings are quite inconsistent. Specifically, crucial performance drivers and other measures are incorporated into an original model, which reveals their synergies and their impact on the dynamic dimensions of firm survival. Additionally, it enhances the stream of research that investigates firm survival under crisis since very few similar empirical studies have been conducted. Finally, firm survival is not measured as a static concept but rather as a dynamic one (firm survival – current situation and firm survival – future situation). Overall, the final model can explain 35.2% of the variance in “firm survival – current situation” and 46.3% of the variance in “firm survival – future situation.”

Details

EuroMed Journal of Business, vol. 17 no. 4
Type: Research Article
ISSN: 1450-2194

Keywords

Open Access
Article
Publication date: 7 July 2022

Paweł Chudziński, Szymon Cyfert, Wojciech Dyduch and Maciej Zastempowski

The purpose of this paper is to analyze the leadership decisions taken during the crisis and their influence on the goals recognized by managers as crucial for surviving.

Abstract

Purpose

The purpose of this paper is to analyze the leadership decisions taken during the crisis and their influence on the goals recognized by managers as crucial for surviving.

Design/methodology/approach

During the survey, conducted in April 2020 (one month after the first economic lockdown in Poland), as part of a research project called Sur(VIR)val – Survival during the virus, data was collected from 178 leaders from randomly selected companies from Poland using the CAWI method. Ordered logistic regression modeling was used to examine the impact of the decisions taken by company leaders on the goals seen by leaders as most important for company survival.

Findings

The results obtained in the study show that during the first Covid-19 lockdown in 2020, leaders made decisions that can be seen as oriented toward survival and continuity. Changing to remote working, extending payment deadlines for customers, as well as selective employment reduction turned out to have the greatest influence on strategic support for maintaining current production levels and retaining competent employees in order to survive the crisis.

Research limitations/implications

This study has certain limitations. First, the list of leadership decisions and company goals used as dependent variables is not exhaustive. Second, the selection of business goals oriented toward survival may not derive directly from the lockdown situation. Third, our study did not measure the actual accomplishment of the company goals, but the managerial perceptions as to which ones are crucial for company survival during crises, and which of them should be given strategic support respectively. Fourth, the research sample was randomly constructed and covered only business organizations in Poland. Fifth, the hypotheses were formulated in a way that treated leadership decisions as one construct. Finally, we used survey, with a scale measuring managerial perceptions.

Practical implications

Leaders should ensure that proper IT tools are developed within the organization, and that the skill level of employees is high enough for fast shifting employees on to remote working. At the same time, it is important to maintain IT infrastructure at a high level. In terms of general recommendations for leaders, they should make quick decisions, maintain the most valuable resources of the company (human resources and cash flow) and take actions aimed at taking advantage of opportunities (R&D) during and after the crisis.

Social implications

Additionally, due to the key importance of human resources for the survival of the organization, leaders should respond quickly by making flexible decisions about sending employees on leave and downtime. As human resources are the most valuable assets of the company from the point of view of its survival, decisions concerning employment reduction should be taken carefully. Leaders who acted in panic after the first lockdown and made employees redundant, later on had problems recruiting skilled employees back and strived to return to full organizational capacity.

Originality/value

Although scholars have investigated leadership decisions and actions taken during economic crises, little is known about how leaders behave when taken by surprise, and what decisions they make when the duration of a crisis is difficult to predict. The results of this study show which leadership decisions during the first Covid-19 lockdown in 2020 influenced prioritizing critical company goals oriented toward survival.

Details

Journal of Organizational Change Management, vol. 35 no. 8
Type: Research Article
ISSN: 0953-4814

Keywords

Article
Publication date: 21 March 2016

Scott Dellana and David West

The purpose of this paper is to apply survival analysis, using Cox proportional hazards regression (CPHR), to the problem of predicting if and when supply chain (SC…

3046

Abstract

Purpose

The purpose of this paper is to apply survival analysis, using Cox proportional hazards regression (CPHR), to the problem of predicting if and when supply chain (SC) customers or suppliers might file a petition for bankruptcy so that proactive steps may be taken to avoid a SC disruption.

Design/methodology/approach

CPHR is first compared to multiple discriminant analysis (MDA) and logistic regression (LR) to assess its suitability and accuracy to SC applications using three years of financial quarterly data for 69 non-bankrupt and 74 bankrupt organizations. A k-means clustering approach is then applied to the survival curves of all 143 organizations to explore heuristics for predicting the timing of bankruptcy petitions.

Findings

CPHR makes bankruptcy predictions at least as accurately as MDA and LR. The survival function also provides valuable information on when bankruptcy might occur. This information allows SC members to be prioritized into three groups: financially healthy companies of no immediate risk, companies with imminent risk of bankruptcy and companies with intermediate levels of risk that need monitoring.

Originality/value

The current paper proposes a new analytical approach to scanning and assessing the financial risk of SC members (suppliers or customers). Traditional models are able to predict if but not when a financial failure will occur. Lacking this information, it is impossible for SC managers to prioritize risk mitigation activities. A simple decision rule is developed to guide SC managers in setting these priorities.

Details

The Journal of Risk Finance, vol. 17 no. 2
Type: Research Article
ISSN: 1526-5943

Keywords

Article
Publication date: 1 February 2000

Ingrid Bonn

Reports the results of an empirical study investigating the key factors that affected the survival of large manufacturing organizations between 1982 and 1993 in Australia…

2348

Abstract

Reports the results of an empirical study investigating the key factors that affected the survival of large manufacturing organizations between 1982 and 1993 in Australia. Four broad categories of variables were examined: environmental variables, organizational variables, company strategies and ownership characteristics. Using logistic regression analysis, it was found that the following variables were significant for company survival: size, planning system, corporate direction, research and development and ownership characteristics.

Details

Journal of Organizational Change Management, vol. 13 no. 1
Type: Research Article
ISSN: 0953-4814

Keywords

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