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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. 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.
    2. 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.
    3. 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.
    4. Tsuchiya, Ryuichiro & 土屋, 隆一郎, 2006. "The Effect of Prior Employer Firm Size on Entrepreneurs' Skills," Discussion Papers 2006-16, Graduate School of Economics, Hitotsubashi University.
    5. Metzger, Georg, 2006. "Once bitten, twice shy? The performance of entrepreneurial restarts," ZEW Discussion Papers 06-083, ZEW - Leibniz Centre for European Economic Research.
    6. Esho, Ebes & Verhoef, Grietjie, 2018. "The Funding Gap and the Financing of Small and Medium Businesses: An Integrated Literature Review and an Agenda," MPRA Paper 90153, University Library of Munich, Germany, revised 21 Nov 2018.
    7. 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.
    8. 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 & University of Caen) 2016-01, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    9. repec:ipg:wpaper:2013-012 is not listed on IDEAS
    10. Arnab Bhattacharjee & Jean Bonnet & Nicolas Le Pape & Régis Renault, 2005. "Inferring the Unobserved Human Capital of Entrepreneurs," Post-Print halshs-00337435, HAL.
    11. 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.
    12. Jean Bonnet, 2016. "From Knowledge to Innovation Economy: Developing Education and Creating Entrepreneurial Ecosystems," Economics Working Paper Archive (University of Rennes & University of Caen) 2016-02, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    13. Nam Pham Xuan & Thanh Ha Le, 2023. "Bribery and firm survival in Vietnam: Moderating effects of market competition, credit, and institutional constraints," Review of Development Economics, Wiley Blackwell, vol. 27(2), pages 1242-1269, May.
    14. Pham, Dai Van, 2024. "The effects of superstition on firms' investment behavior: Evidence from Vietnam, an irreligious country✰," Journal of Comparative Economics, Elsevier, vol. 52(1), pages 1-27.
    15. Ali Smida & Nabil Khelil, 2010. "Repenser l’échec entrepreneurial des petites entreprises émergentes," Post-Print halshs-02505930, HAL.
    16. Harald Strotmann, 2007. "Entrepreneurial Survival," Small Business Economics, Springer, vol. 28(1), pages 87-104, January.
    17. Canello, Jacopo, 2016. "Migrant entrepreneurs and local networks in industrial districts," Research Policy, Elsevier, vol. 45(10), pages 1953-1964.
    18. 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.
    19. Behnam Azhdari & Jean Bonnet & Sébastien Bourdin, 2022. "Towards a Causal Model and Causal Inference of Regional Entrepreneurship Development Index, its antecedents and outcomes in European regions," Economics Working Paper Archive (University of Rennes & University of Caen) 2022-06, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.

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