Firm Mortality and Natal Financial Care

B-Tier
Journal: Journal of Financial and Quantitative Analysis
Year: 2015
Volume: 50
Issue: 1-2
Pages: 61-88

Authors (3)

Bhattacharya, Utpal (Hong Kong University of Scienc...) Borisov, Alexander (not in RePEc) Yu, Xiaoyun (not in RePEc)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We construct a mortality table for U.S. public companies during 1985–2006. We find that the age-specific mortality rates of firms initially increase, peaking at age three, and then decrease with age, implying that the first 3 years of public life are critical. Financial intermediaries involved around the “public birth” of a firm (e.g., venture capitalists (VCs) and high-quality underwriters) are associated with lower firm mortality rates, sometimes for up to 7 years after the initial public offering (IPO). VCs reduce mortality rates more through natal financial care than through selection, whereas high-quality underwriters affect firm mortality more through selection.

Technical Details

RePEc Handle
repec:cup:jfinqa:v:50:y:2015:i:1-2:p:61-88_00
Journal Field
Finance
Author Count
3
Added to Database
2026-01-24