Firm survival, uncertainty and financial frictions: is there a financial uncertainty accelerator?

Byrne, J. P., Spaliara, M. E. and Tsoukas, S. (2016) Firm survival, uncertainty and financial frictions: is there a financial uncertainty accelerator? Economic Inquiry, 54(1), pp. 375-390. (doi:10.1111/ecin.12240)

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Abstract

Using a large panel of unquoted UK firms over the period 2000-09, we examine the impact of firm-specific uncertainty on corporate failures. In this context we also distinguish between firms which are likely to be more or less dependent on bank finance as well as public and non-public companies. Our results document a significant effect of uncertainty on firm survival. This link is found to be more potent during the recent financial crisis compared with tranquil periods. We also uncover significant firm-level heterogeneity since the survival chances of bank-dependent and non-public firms are most affected by changes in uncertainty, especially during the recent global financial crisis.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Tsoukas, Professor Serafeim and Spaliara, Dr Marina Eliza and Byrne, Dr Joseph
Authors: Byrne, J. P., Spaliara, M. E., and Tsoukas, S.
Subjects:H Social Sciences > HG Finance
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Economic Inquiry
Publisher:Wiley-Blackwell Publishing, Inc.
ISSN:0095-2583
ISSN (Online):1465-7295
Copyright Holders:Copyright © 2015 Western Economic Association International
First Published:First published in Economic Inquiry 54(1):375-390
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher.

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