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Growth paths and routes to exit: 'shadow of death' effects for new firms in Japan.

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Authors: Coad, Alex1,2 (AUTHOR), Kato, Masatoshi3,4 (AUTHOR) mkato@kwansei.ac.jp
Source: Small Business Economics. Oct2021, Vol. 57 Issue 3, p1145-1173. 29p. 1 Diagram, 14 Charts, 4 Graphs.
Subject Terms: *Sales statistics, *Organizational performance, *Business enterprises, *Liquidation
Geographic Terms: Japan
Abstract: Research has recently emphasized that the non-survival of entrepreneurial firms can be disaggregated into distinct exit routes such as merger and acquisition (M&A), voluntary closure, and failure. Firm performance is an alleged determinant of exit route. However, there is a lack of evidence linking exit routes to their previous growth performance. We contribute to this gap by analyzing a cohort of incorporated firms in Japan and find some puzzles for the standard view. Our empirical analysis suggests that sales growth generally reduces the probability of exit by merger, voluntary liquidation, and also bankruptcy. However, the relationship is U-shaped—such that rapid growth actually increases the probability of exit. More generally, each of the three exit routes can occur all across the growth rate distribution. Large firms are more likely to exit via merger or bankruptcy, while small firms are more likely to exit via voluntary liquidation. [ABSTRACT FROM AUTHOR]
Database: Entrepreneurial Studies Source
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PubType: Academic Journal
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  Data: <searchLink fieldCode="AR" term="%22Coad%2C+Alex%22">Coad, Alex</searchLink><relatesTo>1,2</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Kato%2C+Masatoshi%22">Kato, Masatoshi</searchLink><relatesTo>3,4</relatesTo> (AUTHOR)<i> mkato@kwansei.ac.jp</i>
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  Data: <searchLink fieldCode="JN" term="%22Small+Business+Economics%22">Small Business Economics</searchLink>. Oct2021, Vol. 57 Issue 3, p1145-1173. 29p. 1 Diagram, 14 Charts, 4 Graphs.
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  Data: *<searchLink fieldCode="DE" term="%22Sales+statistics%22">Sales statistics</searchLink><br />*<searchLink fieldCode="DE" term="%22Organizational+performance%22">Organizational performance</searchLink><br />*<searchLink fieldCode="DE" term="%22Business+enterprises%22">Business enterprises</searchLink><br />*<searchLink fieldCode="DE" term="%22Liquidation%22">Liquidation</searchLink>
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  Label: Geographic Terms
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  Data: <searchLink fieldCode="DE" term="%22Japan%22">Japan</searchLink>
– Name: Abstract
  Label: Abstract
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  Data: Research has recently emphasized that the non-survival of entrepreneurial firms can be disaggregated into distinct exit routes such as merger and acquisition (M&A), voluntary closure, and failure. Firm performance is an alleged determinant of exit route. However, there is a lack of evidence linking exit routes to their previous growth performance. We contribute to this gap by analyzing a cohort of incorporated firms in Japan and find some puzzles for the standard view. Our empirical analysis suggests that sales growth generally reduces the probability of exit by merger, voluntary liquidation, and also bankruptcy. However, the relationship is U-shaped—such that rapid growth actually increases the probability of exit. More generally, each of the three exit routes can occur all across the growth rate distribution. Large firms are more likely to exit via merger or bankruptcy, while small firms are more likely to exit via voluntary liquidation. [ABSTRACT FROM AUTHOR]
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RecordInfo BibRecord:
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      – Type: doi
        Value: 10.1007/s11187-020-00341-z
    Languages:
      – Code: eng
        Text: English
    PhysicalDescription:
      Pagination:
        PageCount: 29
        StartPage: 1145
    Subjects:
      – SubjectFull: Sales statistics
        Type: general
      – SubjectFull: Organizational performance
        Type: general
      – SubjectFull: Business enterprises
        Type: general
      – SubjectFull: Liquidation
        Type: general
      – SubjectFull: Japan
        Type: general
    Titles:
      – TitleFull: Growth paths and routes to exit: 'shadow of death' effects for new firms in Japan.
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            NameFull: Coad, Alex
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            NameFull: Kato, Masatoshi
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            – D: 01
              M: 10
              Text: Oct2021
              Type: published
              Y: 2021
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              Value: 57
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          Titles:
            – TitleFull: Small Business Economics
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