Abstract

PARRA, JUAN FELIPE. PROBABILITY DETERMINANTS OF NEW ENTERPRISES CLOSUREIN BOGOTÁ. Rev.fac.cienc.econ. [online]. 2011, vol.19, n.1, pp.27-53. ISSN 0121-6805.

This article analyzes the determinants of probability of closing a new firm in the market before completing five years of operation. Macroeconomic and microeconomic conditions which were experienced by those firms in Bogotá were studied. The study reveals that it can be affirmed that the optimum size of a firm to enter into the market is small and medium enterprise (SME). Main findings are, in the first place, that the enterprises most likely to premature bankrupt are micro enterprises, in second place, for some enterprises;moderate indebtedness can be useful for leverage, and finally, high indebtedness is determinant for an enterprise closure before completing its fifth year of operation.

Keywords : Enterprise survival; probit models; new enterprises; enterprise creation; star ups.

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