Exploring Bankruptcy Risk in Young vs. Old Firms: Insights from the Resource Based Perspective

Learning from Flure: Analyzing Bankruptcy, Firm Age, and the Resource-Based Perspective

Abstract:

identifies systematic disparities in factors that drive firm flure between younger firms experiencing early challenges and older companies facing flures after overcoming initial liabilities associated with newness. Analysis of data from 339 Canadian corporate bankruptcies indicates potential root causes for flure within younger firms might be linked to management's inadequate knowledge and financial handling capabilities, while older firms may struggle due to inability to adapt to environmental changes.

This study expands upon previous research by pinpointing the distinct factors influencing bankruptcy across varying stages of firm lifecycle, providing deeper insights into how resource dynamics affect organizational stability over time. By dissecting the role of age as a critical determinant in company flure, it underscores the importance of continuous learning and adaptation strategies for fir mitigate risks throughout their development.

Keywords:

• Liability of Newness

• Resource-Based View RBV

• Bankruptcy

Citation:

Stewart Thornhill Raphael Amit. Learning About Flure: Bankruptcy, Firm Age, and the Resource-Based View. Organization Science, Vol. 14, Issue 5, Sept-Oct. 2003, pp. 497-509.

DOI: 10.1287orsc.14.5.497.16761https:doi.org10.1287orsc.14.5.497.16761

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Link to PDFhttps:doi.org10.1287orsc.14.5.497.16761

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