An article of our colleague prof. Evžen Kočenda, Institutions and determinants of firm survival in European emerging markets, was published in the Journal of Corporate Finance, which aims to publish high quality, original manuscripts that analyze issues related to corporate finance. The article was cowritten by Ichiro Iwasaki from Hitotsubashi University, Tokyo, and Eduard Baumöhl from University of Economics in Bratislava.
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.
Autor - Mgr. Ema C. Stašová