Financial Constraints, Global Engagement, and Firm Survival in the United Kingdom: Evidence from Micro Data

Guariglia, A.; Bridges, S.

doi:10.1111/j.1467-9485.2008.00461.x

Financial Constraints, Global Engagement, and Firm Survival in the United Kingdom: Evidence from Micro Data

Guariglia, A.; Bridges, S.

Authors

A. Guariglia

S. Bridges

Abstract

Financial constraints have been found to play an important role on various aspects of firm behavior. Yet, their effects on firm survival have been largely neglected. We use a panel of 61,496 UK firms over the period 1997–2002 to study the effects of financial variables on firms' failure probabilities, differentiating firms into globally engaged and purely domestic. Estimating a wide range of specifications, we find that lower collateral and higher leverage result in higher failure probabilities for purely domestic than for globally engaged firms. This can be seen as evidence that global engagement shields firms from financial constraints.

Citation

Guariglia, A., & Bridges, S. (2008). Financial Constraints, Global Engagement, and Firm Survival in the United Kingdom: Evidence from Micro Data. Scottish Journal of Political Economy, 55(4), 444-464. https://doi.org/10.1111/j.1467-9485.2008.00461.x

Journal Article Type	Article
Publication Date	Sep 1, 2008
Deposit Date	May 22, 2009
Publicly Available Date	Mar 9, 2010
Journal	Scottish Journal of Political Economy
Print ISSN	0036-9292
Electronic ISSN	1467-9485
Publisher	Wiley
Peer Reviewed	Peer Reviewed
Volume	55
Issue	4
Pages	444-464
DOI	https://doi.org/10.1111/j.1467-9485.2008.00461.x
Keywords	Firm survival, Financial constraints, Global engagement.
Public URL	https://durham-repository.worktribe.com/output/1528730