We suggest that underlying age-variant processes
within organizations have a direct bearing on mortality
risk. Age is an easily observable characteristic, but
it may not be age that matters; rather, it is how well
a firm's resources and capabilities are aligned with the
demands of the competitive environment (Amit and
Schoemaker 1993). Young firms strive to develop a competitive
edge. Many fail and exit when their internal
asset stocks are exhausted. Others successfully develop
resources and capabilities that enable them to survive
beyond infancy and adolescence. The development of
a viable competitive position, whether deliberate (e.g.,
investment in specialized assets) or inadvertent (e.g., due
to path dependency or causal ambiguity), may subsequently
expose firms to mortality risks if the competitive
landscape changes and the well-founded organizational
assets hinder adaptation to the new environment (Hannan
and Freeman 1977, 1984; Leonard-Barton 1992). We
thus expect to observe different causal mechanisms
between firms that fail early and those that fail at a
later stage. Young failures should be attributable to
inadequate resources and capabilities (relative to initial
endowments)