Institutions and determinants of firm survival in European emerging markets



Year of publication 2019
Type Article in Periodical
Magazine / Source Journal of Corporate Finance
MU Faculty or unit

Faculty of Economics and Administration

Keywords Firm survival; Institutions; European emerging markets; Survival and exit determinants; Hazards model
Description We analyze the impact of institutional quality on firm survival in 15 European emerging markets. We employ the Cox proportional hazards model with a large dataset of firms during 2006–2015. Our results show that institutional quality (IQ) is a significant preventive factor for firm survival, and it displays diminishing returns as its effect is largest for low-level IQ countries and smallest for high-level IQ countries. In terms of specific indicators, the level of national governance and the extent of corruption control exhibit the key impacts. In terms of firm-specific controls, indicators of ownership structure and aggregate financial performance are the economically most significant factors associated with increased survival probability of firms in European emerging markets.

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