Cox regression with doubly truncated responses and time-dependent covariates: the impact of innovation on firm survival

Abstract

The creation of new firms is an important incentive for the economic growth of a country, since it generates employment, it encourages the competition, and promotes innovation. In this work, we investigate the survival of Spanish firms which were created since 2001 and closed down between 2004 and 2012. The information was gathered from Technological Innovation Panel (PITEC), a survey with a focus the technological innovation in Spanish firms. In particular, a Cox regression model with time-dependent covariates was used in order to identify and quantify the determinants of the risk of exit for the firm. The selection bias due to the interval sampling for the firms was corrected by using methods for doubly truncated lifetimes. Interestingly, it is seen how the correction for the selection bias changes both the size and the statistical significance of the effects provided by standard Cox regression.

Keywords:

• Interval sampling
• selection bias
• inverse probability weighting
• firm lifespan
• economic cycle
• panel data

Acknowledgments

The authors thank two anonymous reviewers and an Associate Editor for comments and suggestions, which have served to improved the paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Additional information

Funding

This work was supported by the Ministerio de Ciencia e Innovación [grant numbers PID2020-118101GB-I00 and PID2019-106677GB-I00].