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Founded in adversity: Operations-based survival strategies of ventures founded during a recession

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  • Terjesen, Siri A.
  • João Guedes, Maria
  • Patel, Pankaj C.

Abstract

We examine the survival of 404 new ventures founded during the 2008 recession. We find that industry explains a significant but small percentage of variance in survival (2.81 percent), and therefore focus on which operations-related actions could enhance ventures’ odds of survival. We find marginally significant support for our hypotheses that a venture founded during a recession is more likely to survive if it increases its production efficiency, increases both its production efficiency and variable costs, or increases both its production efficiency and fixed costs in property, plant and equipment. Our findings demonstrate that operational decisions are key determinants of survival for ventures founded during a recession.

Suggested Citation

  • Terjesen, Siri A. & João Guedes, Maria & Patel, Pankaj C., 2016. "Founded in adversity: Operations-based survival strategies of ventures founded during a recession," International Journal of Production Economics, Elsevier, vol. 173(C), pages 161-169.
    • Handle: RePEc:eee:proeco:v:173:y:2016:i:c:p:161-169
    DOI: 10.1016/j.ijpe.2015.12.001
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    Cited by:

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    2. Cui, Li & Chan, Hing Kai & Zhou, Yizhuo & Dai, Jing & Lim, Jia Jia, 2019. "Exploring critical factors of green business failure based on Grey-Decision Making Trial and Evaluation Laboratory (DEMATEL)," Journal of Business Research, Elsevier, vol. 98(C), pages 450-461.
    3. Ungerer, Christina & Reuther, Kevin & Baltes, Guido, 2021. "The lingering living dead phenomenon: Distorting venture survival studies?," Journal of Business Venturing Insights, Elsevier, vol. 16(C).
    4. Patel, Pankaj C. & João Guedes, Maria & Pagano, Michael S. & Olson, Gerard T., 2020. "Industry profitability matters: The value of sustainable growth rate and distance from bankruptcy as enablers of venture survival," Journal of Business Research, Elsevier, vol. 114(C), pages 80-92.

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