Lifespan of information service firms in Japan: a survival analysis

Abstract

The purpose of this paper is an analysis of survival in the Japanese information service industry. Information service firms are generally classified into two typical patterns. One is the group of independent firms such as software vendors, and the other is the group of non-independent such as subsidiaries established by spinning off and so on. We used a sample of 334 firms in Japan and analyzed by Kaplan-Meier estimator method and Cox proportional hazard regression model in order to investigate the difference of survival between these two groups and/or among other attributes. As a result, the lifespan of the information service firms significantly depends on the degree of system integration sales ratio, software development sales ratio, and entrusted processing sales ratio. On the contrary, property of non-independence and high sales ratio with main customers have a negative influence on their survival rates, i.e. lifespan. The paper discusses these results and offers some managerial implications, and future research opportunities are provided.