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Factors Determining the Survival of New Companies

Author

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  • Cegiełka Marlena

    (Faculty of Economic Sciences, University of Warsaw, Poland)

Abstract

This article discusses the determinants of the survival of new companies, with particular emphasis on their sources of financing. We have analysed the impact of experience in the same focal industry, of having a competitive advantage and intellectual property rights (patents and trademarks) and of debt financing on the probability of a start-up's survival, using a logit model based on the Kauffman Firm Survey (KFS) database data covering 4,928 American companies which operated from 2004 to 2011. Additionally, we can demonstrate that start-ups that use debt financing have a better chance of staying in business. Factors such as intellectual capital and competitive advantage are also positively correlated with the prospects for start-up survival.

Suggested Citation

  • Cegiełka Marlena, 2020. "Factors Determining the Survival of New Companies," Central European Economic Journal, Sciendo, vol. 7(54), pages 300-315, January.
    • Handle: RePEc:vrs:ceuecj:v:7:y:2020:i:54:p:300-315:n:16
    DOI: 10.2478/ceej-2020-0021
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    More about this item

    Keywords

    start-up; survival of new companies; sources of financing;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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