In addition to the organizational liabilities noted by
Stinchcombe, young firms may also lack knowledge
about what they can do or should do (Jovanovic 1982,
Lippman and Rumelt 1982), or may not be sufficiently
endowed with the requisite resources to execute
their strategy (Lussier 1995, Venkataraman et al. 1990).
Fichman and Levinthal (1991) suggest that the liability
of newness is not a monotonically decreasing function
of firm age, but that there is an initial "honeymoon"
period during which initial assets buffer the new organization.
They argue that variations in the levels of initial
assets affect the way time affects mortality rates. The
time dependence occurs because the longer an organization
survives (due to initial capital endowments), the
more it will be able to develop relationship-specific capital
and adapt to the environmen