Title
The Liability of Volatility and How it Changes Over Time Among New Ventures
Date Issued
01 September 2020
Access level
open access
Resource Type
journal article
Author(s)
Publisher(s)
SAGE Publications Ltd
Abstract
This article theorizes how short-term revenue volatility affects new venture viability and how such volatility develops over time. Tracking the bank accounts of 6,578 new ventures over a 10-year period, we find that, even after controlling for a range of other factors, short-term revenue volatility is a strong predictor of venture exit. Although short-term revenue volatility is associated with the depletion of buffer resources and financial default, surviving ventures do not, on average, decrease their short-term revenue volatility over time. However, short-term revenue volatility decreases at the cohort level due to higher exit rates of volatile ventures.
Start page
933
End page
963
Volume
44
Issue
5
Language
English
OCDE Knowledge area
Negocios, Administración
Ciencias sociales
Subjects
Scopus EID
2-s2.0-85088594906
Source
Entrepreneurship: Theory and Practice
ISSN of the container
10422587
Sponsor(s)
The authors wish to thank the editor, Alexander McKelvie, and three anonymous reviewers for insightful feedback. We are also grateful to Richard Roberts and the seminar participants at ISBE 2014 (Manchester, UK) and ACERE 2019 (Sydney, Australia). An earlier version of this paper won the “Best Paper Award in Entrepreneurial Performance” at ACERE 2019. The usual caveat applies. The author(s) received no financial support for the research, authorship, and/or publication of this article.
Sources of information:
Directorio de Producción Científica
Scopus