LAUSR

ABSTRACT The financial crisis has caused many business closures, especially in the periphery of the European Monetary Union. In this paper, we use original firm-level Italian data to explore the role of intangibles in limiting firm exit during the crisis. While intangibles strengthen firms’ resilience, i.e. the ability to cope with unexpected shocks, they also entail sunk costs, which expose firms to greater financial risk. In the longer term, when access to external finance is critical for survival, we expect intangibles to play a positive role only if combined with a solid financial structure. Our results support these hypotheses: intangibles directly reduce the probability of firm exit during the initial phase of the crisis (before 2010). At later stages, the beneficial effect of intangible assets is conditional on the firm exhibiting a solid pre-crisis financial status. Managerial and policy implications are discussed.