Business failure of new software firms

This paper investigates business failure of newly-established software firm s. Using a proportional hazards model, we estimate the determinants of busi ness failure among software firms in Japan founded during 1986-1995. The ma in findings of this paper are as follows. First, software firms with suffic ient size or paid-up capital are less likely to fail. Secondly, vertical in tegration increases the probability of failure. Thirdly, manager's attribut es, such as age, affect the probability of failure. Finally, local agglomer ation increases the probability of failure, while macroeconomic growth decr eases the probability.