Institutional Quality and New Firm Survival

31 Pages Posted: 3 Jun 2017

See all articles by Yi Che

Yi Che

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management

Yi Lu

National University of Singapore (NUS) - Department of Economics

Zhigang Tao

The University of Hong Kong - School of Business

Date Written: July 2017

Abstract

The existing literature on firm survival focuses almost exclusively on firm‐ and industry‐level determinants. What is generally overlooked, albeit extremely important for firm survival in developing countries, is the impact of institutional quality. Using data from manufacturing firms in China for the 1998–2005 period, we find that institutional quality has a significant and positive impact on the survival of private enterprises. Specifically, a one‐standard‐deviation increase in the security of property rights protection leads to an 8.8 percent decrease in the hazard rate of private enterprises. Our results are robust to the inclusion of control variables and to various checks.

Keywords: New firm survival, institutional quality, private enterprises, China

Suggested Citation

Che, Yi and Lu, Yi and Tao, Zhigang, Institutional Quality and New Firm Survival (July 2017). Economics of Transition, Vol. 25, Issue 3, pp. 495-525, 2017, Available at SSRN: https://ssrn.com/abstract=2978910 or http://dx.doi.org/10.1111/ecot.12119

Yi Che (Contact Author)

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management ( email )

Huashan Road 1954
Shanghai Jiao Tong University
Shanghai, Shanghai 200030
China

Yi Lu

National University of Singapore (NUS) - Department of Economics ( email )

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Singapore 117570, Singapore 119077
Singapore
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Zhigang Tao

The University of Hong Kong - School of Business ( email )

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Hong Kong
China
(852) 2857-8223 (Phone)
(852) 2858-5614 (Fax)

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