The liability of volatility and how it changes over time among new ventures

Lundmark, Erik, Coad, Alex, Frankish, Julian S and Storey, David J (2020) The liability of volatility and how it changes over time among new ventures. Entrepreneurship Theory and Practice, 44 (5). pp. 933-963. ISSN 1042-2587

[img] PDF - Published Version
Restricted to SRO admin only

Download (693kB)
[img] PDF - Accepted Version
Available under License Creative Commons Attribution-NonCommercial No Derivatives.

Download (792kB)

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.

Item Type: Article
Schools and Departments: University of Sussex Business School > Strategy and Marketing
Depositing User: Joy Blake
Date Deposited: 09 Jan 2020 09:36
Last Modified: 13 Aug 2020 11:30
URI: http://sro.sussex.ac.uk/id/eprint/88043

View download statistics for this item

📧 Request an update