Small Firms' Actions and their Survival Probabilities
AbstractThe small firm is viewed as taking a complex of actions to facilitate market place survival. Selection of such actions involves choice about markets, costs, strategy, finance, organisation, human capital and innovation. Probit models of survival over two years are estimated for a random sample of 150 new businesses for which field work evidence on complex actions is available. Although many actions are found to play at least some role in promoting survival of the small firm, a parsimonious empirical model is presented which emphasises just ten actions. this model indicates the pivotal imortance of reward to the entrepreneurial input, allied to a tight control of the overall wage bill, if the small firm is successful to negotiate the early stage of its life cycle.
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Bibliographic InfoPaper provided by Centre for Research into Industry, Enterprise, Finance and the Firm in its series CRIEFF Discussion Papers with number 9721.
Date of creation: Oct 1997
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small firms; complex actions; probit models; wage bill; entrepreneurial input;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- M2 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- P12 - Economic Systems - - Capitalist Systems - - - Capitalist Enterprises
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