Timing of environmental inspections: survival of the compliant

Environmental inspection agencies have limited resources. A natural response to this shortage of resources is targeting and this targeting policy leads to higher compliance than random inspections. This paper uses individual inspection data on the inspection policy of the environmental agency for the textile industry in Flanders (Belgium). We distinguish between three types of inspections and use a survival model to show that the environmental agency inspects firms in a non-random way. Even though the agency solves most environmental problems, it can increase compliance by using the deterrence effect of more stringent inspections and sanctions.      

Short-term safety or long-term failure? Empirical evidence of the impact of securitization on bank risk

Based on a sample of U.S. commercial banks from 2002 to 2012, this paper shows that bank loan securitization has a significant and positive impact on both Z-scores and the likelihood of bank failure, indicating a short-term risk reduction and a long-term risk increase effect. We also find disparate impacts between mortgage and non-mortgage securitization. Loan sale activities are found to have a similar impact to securitization.     

Live and let die: A survival analysis of foreign R&D units in Swedish MNEs

This paper develops and tests a set of hypotheses regarding factors that influenced the longevity of foreign research and development units in Swedish multinational enterprises over the period 1992–2012. The results reveal an underexplored aspect of the R&D internationalization—the volatility of foreign R&D laboratories. During the investigated period, more than 40% of the R&D units in the sample had been terminated. The results substantiate earlier research regarding the negative effects of mergers and acquisitions on R&D in acquired units but show that these effects are not immediate. They appear – if at all – with a time lag of several years. The hazard of closure for an individual unit seems to be more strongly related to its role and position within the MNE than to local country characteristics. It was smaller for strongly locally embedded units and units with global mandates, but – contrary to expectations – the hazard was greater for units highly integrated with the rest of the MNE.     

Small business survival and inheritance: evidence from Germany

This paper investigates whether small businesses face financial constraints that affect their survival. A model of moral hazard is developed in which financial constraints arise endogenously. The model predicts that higher private assets relax financial constraints and have a positive effect on the firm’s probability of survival. The empirical analysis confirms that the entrepreneur has a higher propensity to stay in business when she inherits capital. This effect is particularly strong for entrepreneurs who switch from self-employment into wage employment.

Firm Shutdown During the Financial and the Sovereign Debt Crises: Empirical Evidence from Portugal

This paper examines Portuguese firms’ survival over the business cycle and investigates whether the effect of firm size varies across the phases of the cycle and with the type of shock associated with periods of economic contraction. Our results show that smaller firms are more likely to shut down than larger firms. Within each size band, however, we found that during the two crises examined, micro firms experienced hazards of closing (relative to large firms) at least similar to those observed in the pre-crisis period, while medium-sized firms were found to have been more vulnerable during the financial crisis period but showed more resilience during the sovereign debt crisis. The results suggest that during the sovereign debt crisis, firms faced a higher probability of closing than they did during the financial crisis.     

ISO 14001 and the Reduction of Toxic Emissions

ISO 14001 is an international standard for Environmental Management Systems, adopted by over 36,000 organizations worldwide. This paper attempts to determine the length of time after which a given company has implemented ISO 14001 experiences emission reduction. The sample used is a group of 264 manufacturing facilities in the USA, which represent 23 percent of all the ISO 14001 certified organizations in the US, analyzed throughout the period from 1996 to 2001. The results show that 75 percent of the companies experienced a reduction in their emissions, among which 53 percent had already done so just one year after obtaining ISO 14001.     

Characteristic properties of multivariate survival functions in terms of residual life distributions

This paper discusses the relationships among some characteristic properties of the multivariate survival function based on the residual life distribution, and provides the conditions for their equivalence. In the meanwhile, the corrected version of Ma (1996, Theorem 1 (ii) and (iii)) is given.     

Modeling the relationship between networking and firm performance

Network theory suggests that successful business ownership might depend on the ability of owners to gain access to resources not under their control in a cost effective way through networking. To date, however, there has been little empirical support for this proposition, particularly for established firms. The results of this study, based on a large longitudinal database, indicate a significant positive relationship between networking (particularly with formal networks such as external accountants) and both firm survival and, to a lesser extent, growth, but not ROE. Further, network intensity is found to be associated with survival, and network range with growth.     

Franchise failure: a reassessment of the Bates (1995) results

Franchising is often touted as a safe route to business ownership in the service arena. Yet findings by Bates (J Small Bus Manage 33(2):26–36, 1995) suggest that franchising may be a riskier alternative for prospective business owners than starting a non-franchised business. We contend that this conclusion is inappropriate because flaws in Bates’ study lend themselves to alternative interpretations of his results. The most critical flaws and plausible alternative interpretations are explained, and implications for prospective business owners are discussed.     

The duration of new firms in banking: an application of Cox regression analysis

This paper studies the duration of two cohorts of entrants in the Italian financial intermediation industry. Using the Cox (1972) Proportional Hazards Model, it analyses the link between duration of each newborn firm and its start-up size, as well as a series of industry-specific characteristics. It emerges that not only did regulatory reform in 1990 result in a process of branch proliferation and industry concentration, but it also set in motion a pre-entry selection mechanism. Conversely, before completion of the regulatory reform, in 1989, entry was possible even for very small firms, and larger new entrants survived longer than their smaller counterparts, and this independently of the features of spatial and structural competition. First version received: Nov. 98/final version received: Oct. 99