To invest or not to invest, that is the question: analysis of firm behavior under anticipated shocks

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11640%2F16%3A00461733" target="_blank" >RIV/00216208:11640/16:00461733 - isvavai.cz</a>

Výsledek na webu

<a href="http://dx.doi.org/10.1371/journal.pone.0158782" target="_blank" >http://dx.doi.org/10.1371/journal.pone.0158782</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1371/journal.pone.0158782" target="_blank" >10.1371/journal.pone.0158782</a>

Jazyk výsledku

angličtina

Název v původním jazyce

To invest or not to invest, that is the question: analysis of firm behavior under anticipated shocks

Popis výsledku v původním jazyce

When companies are faced with an upcoming and expected economic shock some of them tend to react better than others. They adapt by initiating investments thus successfully weathering the storm, while others, even though they possess the same information set, fail to adopt the same business strategy and eventually succumb to the crisis. We use a unique setting of the recent financial crisis in Croatia as an exogenous shock that hit the country with a time lag, allowing the domestic firms to adapt. We perform a survival analysis on the entire population of 144,000 firms in Croatia during the period from 2003 to 2015, and test whether investment prior to the anticipated shock makes firms more likely to survive the recession. We find that small and micro firms, which decided to invest, had between 60 and 70% higher survival rates than similar firms that chose not to invest. This claim is supported by both non-parametric and parametric tests in the survival analysis. From a normative perspective this finding could be important in mitigating the negative effects on aggregate demand during strong recessionary periods.

Název v anglickém jazyce

To invest or not to invest, that is the question: analysis of firm behavior under anticipated shocks

Popis výsledku anglicky

When companies are faced with an upcoming and expected economic shock some of them tend to react better than others. They adapt by initiating investments thus successfully weathering the storm, while others, even though they possess the same information set, fail to adopt the same business strategy and eventually succumb to the crisis. We use a unique setting of the recent financial crisis in Croatia as an exogenous shock that hit the country with a time lag, allowing the domestic firms to adapt. We perform a survival analysis on the entire population of 144,000 firms in Croatia during the period from 2003 to 2015, and test whether investment prior to the anticipated shock makes firms more likely to survive the recession. We find that small and micro firms, which decided to invest, had between 60 and 70% higher survival rates than similar firms that chose not to invest. This claim is supported by both non-parametric and parametric tests in the survival analysis. From a normative perspective this finding could be important in mitigating the negative effects on aggregate demand during strong recessionary periods.

Druh

J_x - Nezařazeno - Článek v odborném periodiku (Jimp, Jsc a Jost)

CEP obor

AH - Ekonomie

OECD FORD obor

—

Projekt

—

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2016

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

PLoS ONE

ISSN

1932-6203

e-ISSN

—

Svazek periodika

11

Číslo periodika v rámci svazku

8

Stát vydavatele periodika

US - Spojené státy americké

Počet stran výsledku

18

Strana od-do

1-18

Kód UT WoS článku

000381380400005

EID výsledku v databázi Scopus

2-s2.0-84983394490