Publication
Why do firms live longer than others? The elixir of (eternal) life of blue chip American companies
| Summary: | Purpose: Why do certain companies live longer than others? The average lifespan of a listed north and South American company is over 33 years and in Europe the average age of a company is 52 (Note 1). In 1288, Stora Enso a big pulp and paper company from Sweden issued its first share. According to credit rating agency Tokyo Shoko Research, in Japan, there are more than 20,000 companies with more than 100 years’ old. Through a sample of blue ship American listed oldest companies and quarter panel data from 1988-2013 this article identifies more than 8 significant explanatory variables and ascertains relevant factors related with longevity. Methodology: A new robust standard errors for panel regressions with cross-sectional dependence based on Driscoll-Kraay estimator is applied. This method (stata xtscc) is heteroskedasticity consistent and the standard error estimates are robust to general forms of cross-sectional and temporal dependence surpassing the deficiencies of traditional panel data statistical approaches. Findings: The sample of blue ship companies and panel regressions with Driscoll-Kraay estimator shows that the most relevant factors to induce longevity are related with growth opportunities perspective and horizon, cash liquidity, profitability and shareholders remuneration whether from dividends or repurchases, capital structure, strong claims-compliance-liability structure department, innovation and firm size. Originality: This paper’s topic considers for the first-time age as a dependent variable and not a control one. Also, the large time period of study, including quarterly observations is new, as well as the original approach to estimation applied to this theme, considered as an alternative to traditional panel data methods. Practical implications: With these determinants identified, professionals and academics can use them as benchmarking and a recipe to endure and assuring bigger lifespan for other mature and young companies. |
|---|---|
| Main Authors: | Reis, Pedro |
| Subject: | Company life Firm life Lifespan Age Endure |
| Year: | 2018 |
| Country: | Portugal |
| Document type: | article |
| Access type: | restricted access |
| Associated institution: | Instituto Politécnico de Viseu |
| Language: | English |
| Origin: | Repositório Científico do Instituto Politécnico de Viseu |
| _version_ | 1868350797668941824 |
|---|---|
| author | Reis, Pedro |
| author_facet | Reis, Pedro |
| author_role | author |
| contributor_name_str_mv | Instituto Politécnico de Viseu |
| country_str | PT |
| creators_json_txt | [{\"Person.name\":\"Reis, Pedro\",\"Person.identifier.orcid\":\"0000-0003-1301-6645\"}] |
| datacite.contributors.contributor.contributorName.fl_str_mv | Instituto Politécnico de Viseu |
| datacite.creators.creator.creatorName.fl_str_mv | Reis, Pedro |
| datacite.date.Accepted.fl_str_mv | 2018-01-01T00:00:00Z |
| datacite.date.available.fl_str_mv | 2018-06-06T08:40:57Z |
| datacite.date.embargoed.fl_str_mv | 2018-06-06T08:40:57Z |
| datacite.rights.fl_str_mv | http://purl.org/coar/access_right/c_16ec |
| datacite.subjects.subject.fl_str_mv | Company life Firm life Lifespan Age Endure |
| datacite.titles.title.fl_str_mv | Why do firms live longer than others? The elixir of (eternal) life of blue chip American companies |
| dc.contributor.none.fl_str_mv | Instituto Politécnico de Viseu |
| dc.creator.none.fl_str_mv | Reis, Pedro |
| dc.date.Accepted.fl_str_mv | 2018-01-01T00:00:00Z |
| dc.date.available.fl_str_mv | 2018-06-06T08:40:57Z |
| dc.date.embargoed.fl_str_mv | 2018-06-06T08:40:57Z |
| dc.format.none.fl_str_mv | application/pdf |
| dc.identifier.none.fl_str_mv | http://hdl.handle.net/10400.19/4949 |
| dc.language.none.fl_str_mv | eng |
| dc.publisher.none.fl_str_mv | Sciedu Press |
| dc.rights.none.fl_str_mv | http://purl.org/coar/access_right/c_16ec |
| dc.subject.none.fl_str_mv | Company life Firm life Lifespan Age Endure |
| dc.title.fl_str_mv | Why do firms live longer than others? The elixir of (eternal) life of blue chip American companies |
| dc.type.none.fl_str_mv | http://purl.org/coar/resource_type/c_6501 |
| description | Purpose: Why do certain companies live longer than others? The average lifespan of a listed north and South American company is over 33 years and in Europe the average age of a company is 52 (Note 1). In 1288, Stora Enso a big pulp and paper company from Sweden issued its first share. According to credit rating agency Tokyo Shoko Research, in Japan, there are more than 20,000 companies with more than 100 years’ old. Through a sample of blue ship American listed oldest companies and quarter panel data from 1988-2013 this article identifies more than 8 significant explanatory variables and ascertains relevant factors related with longevity. Methodology: A new robust standard errors for panel regressions with cross-sectional dependence based on Driscoll-Kraay estimator is applied. This method (stata xtscc) is heteroskedasticity consistent and the standard error estimates are robust to general forms of cross-sectional and temporal dependence surpassing the deficiencies of traditional panel data statistical approaches. Findings: The sample of blue ship companies and panel regressions with Driscoll-Kraay estimator shows that the most relevant factors to induce longevity are related with growth opportunities perspective and horizon, cash liquidity, profitability and shareholders remuneration whether from dividends or repurchases, capital structure, strong claims-compliance-liability structure department, innovation and firm size. Originality: This paper’s topic considers for the first-time age as a dependent variable and not a control one. Also, the large time period of study, including quarterly observations is new, as well as the original approach to estimation applied to this theme, considered as an alternative to traditional panel data methods. Practical implications: With these determinants identified, professionals and academics can use them as benchmarking and a recipe to endure and assuring bigger lifespan for other mature and young companies. |
| dirty | 0 |
| eu_rights_str_mv | restrictedAccess |
| format | article |
| fulltext.url.fl_str_mv | https://repositorio.ipv.pt/bitstreams/69142c21-a75f-4cce-b526-d0294c297d17/download |
| id | ripv_eb2df73755b7916cfb44dec4002ecb7f |
| identifier.url.fl_str_mv | http://hdl.handle.net/10400.19/4949 |
| instacron_str | ripv |
| institution | Instituto Politécnico de Viseu |
| instname_str | Instituto Politécnico de Viseu |
| language | eng |
| network_acronym_str | ripv |
| network_name_str | Repositório Científico do Instituto Politécnico de Viseu |
| oai_identifier_str | oai:repositorio.ipv.pt:10400.19/4949 |
| organization_str_mv | urn:organizationAcronym:ripv |
| person_str_mv | Reis, Pedro Reis, Pedro https://www.ciencia-id.pt/B71F-60A3-3FB5 B71F-60A3-3FB5 http://orcid.org/0000-0003-1301-6645 0000-0003-1301-6645 |
| publishDate | 2018 |
| publisher.none.fl_str_mv | Sciedu Press |
| reponame_str | Repositório Científico do Instituto Politécnico de Viseu |
| repository_id_str | urn:repositoryAcronym:ripv |
| service_str_mv | urn:repositoryAcronym:ripv |
| spelling | engSciedu Presspt_PTPurpose: Why do certain companies live longer than others? The average lifespan of a listed north and South American company is over 33 years and in Europe the average age of a company is 52 (Note 1). In 1288, Stora Enso a big pulp and paper company from Sweden issued its first share. According to credit rating agency Tokyo Shoko Research, in Japan, there are more than 20,000 companies with more than 100 years’ old. Through a sample of blue ship American listed oldest companies and quarter panel data from 1988-2013 this article identifies more than 8 significant explanatory variables and ascertains relevant factors related with longevity. Methodology: A new robust standard errors for panel regressions with cross-sectional dependence based on Driscoll-Kraay estimator is applied. This method (stata xtscc) is heteroskedasticity consistent and the standard error estimates are robust to general forms of cross-sectional and temporal dependence surpassing the deficiencies of traditional panel data statistical approaches. Findings: The sample of blue ship companies and panel regressions with Driscoll-Kraay estimator shows that the most relevant factors to induce longevity are related with growth opportunities perspective and horizon, cash liquidity, profitability and shareholders remuneration whether from dividends or repurchases, capital structure, strong claims-compliance-liability structure department, innovation and firm size. Originality: This paper’s topic considers for the first-time age as a dependent variable and not a control one. Also, the large time period of study, including quarterly observations is new, as well as the original approach to estimation applied to this theme, considered as an alternative to traditional panel data methods. Practical implications: With these determinants identified, professionals and academics can use them as benchmarking and a recipe to endure and assuring bigger lifespan for other mature and young companies.application/pdfpt_PTWhy do firms live longer than others? The elixir of (eternal) life of blue chip American companiesPersonalReis, PedroDSpacehttp://dspace.org/items/84bd8fcc-7ce1-49f7-9669-9ccf9b9ce2f0DSpacehttp://dspace.org/items/84bd8fcc-7ce1-49f7-9669-9ccf9b9ce2f0ReisPedroCiência IDhttps://www.ciencia-id.ptB71F-60A3-3FB5ORCIDhttp://orcid.org0000-0003-1301-6645Researcher IDhttps://www.researcherid.comN-9211-2018Scopus Author IDhttps://www.scopus.com56747454000HostingInstitutionOrganizationalInstituto Politécnico de Viseue-mailmailto:repositorio@sc.ipv.ptrepositorio@sc.ipv.ptISSNIsPartOf1923-4007(Print)ISSNIsPartOf1923-4015(Online)DOIIsPartOf10.5430/ijba.v9n1p642018-06-06T08:40:57Z20182018-01-01T00:00:00ZHandlehttp://hdl.handle.net/10400.19/4949http://purl.org/coar/access_right/c_16ecrestricted accessCompany lifeFirm lifeLifespanAgeEndure379943 bytesliteraturehttp://purl.org/coar/resource_type/c_6501journal articlehttp://purl.org/coar/access_right/c_16ecapplication/pdffulltexthttps://repositorio.ipv.pt/bitstreams/69142c21-a75f-4cce-b526-d0294c297d17/downloadInternational Journal of Business Administration916474Canada |
| spellingShingle | Why do firms live longer than others? The elixir of (eternal) life of blue chip American companies Reis, Pedro Company life Firm life Lifespan Age Endure |
| status | SINGLETON |
| subject.fl_str_mv | Company life Firm life Lifespan Age Endure |
| title | Why do firms live longer than others? The elixir of (eternal) life of blue chip American companies |
| title_full | Why do firms live longer than others? The elixir of (eternal) life of blue chip American companies |
| title_fullStr | Why do firms live longer than others? The elixir of (eternal) life of blue chip American companies |
| title_full_unstemmed | Why do firms live longer than others? The elixir of (eternal) life of blue chip American companies |
| title_short | Why do firms live longer than others? The elixir of (eternal) life of blue chip American companies |
| title_sort | Why do firms live longer than others? The elixir of (eternal) life of blue chip American companies |
| topic | Company life Firm life Lifespan Age Endure |
| topic_facet | Company life Firm life Lifespan Age Endure |
| url | http://hdl.handle.net/10400.19/4949 |
| visible | 1 |