Environmental Characteristics and Life Duration of Manufacturing Firms in Iran

Document Type : Original Article

Authors

1 Assistant Professor of Economics, Faculty of Economics, Management and Accounting, University of Yazd

2 MA in Economics, Faculty of Economics, Management and Accounting, University of Yazd

Abstract

Although a few studies have been done on the life duration of new firms entrant in Iranian manufacturing industries, but none of them studied the influence of environmental factors on firm's life duration. Accordingly, this study aims to introduce and identify those factors affecting life duration of Iranian manufacturing industries, by the emphasis on environmental characteristics (between provinces). Among 20 variablesin in five groups, namely firm as well as industry, expenditures, human and environment characteristics, 9 variables have categorized as environmental group. Using Cox proportional hazard model and SCI data at firm level, the findings of this paper show that the environmental variables such as unemployment rate and its changes, average growth rate of household income (as a substitution for market demand), growth rate of regional GDP per capita, density and growth of population, regional literacy rate, growth rate of banking facilities and security have significantly affected firms life duration. Consequently, the life duration of manufacturing industries can be assessed and predicted by internal and environmental factors and therefore the life duration is no random variable.

Keywords

References

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Journal of Economics and Modelling
Volume 8, Issue 31 - Serial Number 31
December 2017
Pages 149-178

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