A number of studies on firm failure have confirmed the principle of a liability of newness. Carroll (1983) conducted an exhaustive study using 52 different data sets to find that organizational death rates decline with firm age. Phillips and Kirchoff (1989) found that three out of five new firms fail within their first six years. In a study of over 5,000 Australian businesses, Watson and Everett (1996) found that a higher percentage of failed firms were younger businesses. Using data on U.S. firms, Nucci (1999) also found that business dissolution declined with age regardless of industry, size grouping, or region.

The “Liability of Newness” and Small Firm Access to Debt Capital

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