Firm Failure in Russia during Economic Crises and Growth : A Large Survival Analysis

In this paper, we trace the survival status of more than 110,000 Russian firms in the years of 2007–2015 and examine the determinants of firm survival across periods of economic crisis and growth. Applying the Cox proportional hazards model, we find that the effects of some variables regarded as key determinants of firm survival are not always robust across business cycles. Among the variables that constantly affect firm survival across business cycles and industries, concentration of ownership, the number of board directors and auditors, firm age, and business network are included. By contrast, the effects of some ownership-related variables on firm survival vary depending on the nature of economic recessions such as a global crisis and a local one. There is also evidence that an international audit firm increases the probability of firm survival; however, gaps in the quality between international audit firms and those from Russia decrease over time. These findings suggest that one should not make hasty generalizations regarding the determinants of firm survival by looking at a specific economic period or industry.This research work was financially supported by a Grant-in-Aid for scientific research from the Ministry of Education, Culture, Sports, Science and Technology of Japan (No. 26245034), the Japan Securities Scholarship Foundation (JSSF), the Nomura Foundation, and the Mitsubishi Foundation21, [12] p