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An Explanation of the Life Span of New French Firms

Author

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  • Rafik Abdesselam

    ()

  • Jean Bonnet

    ()

  • Nicolas Le Pape

    ()

Abstract

In contrast to previous studies on firm survival which tend to focus on features related to the structure of the firms and their area of activity, our aim here is to widen the perspective usually adopted in the field, taking into account a larger and more qualitative set of variables. Among these variables, features related to the individual characteristics of the entrepreneur, to the context of entrepreneurship and to the insertion in entrepreneurial networks are significant to explain the life span of new firms. The empirical material is drawn from two surveys, which provide detailed data about a group of new firms created in France in 1994 and closed down before 1997 or still running in 1997. Our empirical approach on qualitative data is based on data analysis methods (linear discriminant analysis, barycentric discriminant analysis, analysis of variance). According to the characteristics of the entrepreneur, the main explanatory factors for the survival of new firms are the fact that they are entrepreneurs who have taken over firms, that they have acquired during their previous occupational activity an experience in the same branch of activity and that they experience a successful integration into the entrepreneurial networks. These three factors show that the survival of young firms is indirectly conditioned by the existence of an initial custom, by the mastery of a job and by the know-how in the entrepreneurial function.

Suggested Citation

  • Rafik Abdesselam & Jean Bonnet & Nicolas Le Pape, 2004. "An Explanation of the Life Span of New French Firms," Small Business Economics, Springer, vol. 23(3), pages 237-254, October.
  • Handle: RePEc:kap:sbusec:v:23:y:2004:i:3:p:237-254
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    Cited by:

    1. Jean Bonnet & Sylvie Cieply & Marcus Dejardin, 2005. "Financial constraints on new firms: looking for regional disparities," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 48(3), pages 217-246.
    2. Arnab Bhattacharjee & Jean Bonnet & Nicolas Le Pape & Régis Renault, 2005. "Inferring the Unobserved Human Capital of Entrepreneurs," Post-Print halshs-00337435, HAL.
    3. Arnab Bhattacharjee & Jean Bonnet & Nicolas Le Pape & Régis Renault, 2008. "Entrepreneurial motives and performance : Why might better educated entrepreneurs be less successful ?," Post-Print halshs-00337431, HAL.
    4. Chen, Xiaohong & Cao, Yu & Wang, Fuqiang, 2010. "A life cycle analysis of Hunan's enterprises and their determinants," China Economic Review, Elsevier, vol. 21(3), pages 470-481, September.
    5. repec:ipg:wpaper:2013-012 is not listed on IDEAS
    6. Martin Carree & Ingrid Verheul & Enrico Santarelli, 2011. "Sectoral patterns of firm exit in Italian provinces," Journal of Evolutionary Economics, Springer, vol. 21(3), pages 499-517, August.
    7. Tsuchiya, Ryuichiro, 2006. "The Effect of Prior Employer Firm Size on Entrepreneurs' Skills," Discussion Papers 2006-16, Graduate School of Economics, Hitotsubashi University.
    8. Harald Strotmann, 2007. "Entrepreneurial Survival," Small Business Economics, Springer, vol. 28(1), pages 87-104, January.
    9. Jean-Pierre Huiban, 2011. "The spatial demography of new plants: urban creation and rural survival," Small Business Economics, Springer, vol. 37(1), pages 73-86, July.
    10. Metzger, Georg, 2006. "Once bitten, twice shy? The performance of entrepreneurial restarts," ZEW Discussion Papers 06-083, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Jean Bonnet, 2016. "From Knowledge to Innovation Economy: Developing Education and Creating Entrepreneurial Ecosystems," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2016-02, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    12. Canello, Jacopo, 2016. "Migrant entrepreneurs and local networks in industrial districts," Research Policy, Elsevier, vol. 45(10), pages 1953-1964.
    13. Tristan Boyer & Régis Blazy, 2014. "Born to be alive? The survival of innovative and non-innovative French micro-start-ups," Small Business Economics, Springer, vol. 42(4), pages 669-683, April.
    14. Jean Bonnet & Robert Cressy, 2016. "Title: An encompassing model and test of the Evans-Jovanovic credit constraints hypothesis," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2016-01, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.

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