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A Resource-Based View Of New Firm Survival: New Perspectives On The Role Of Industry And Exit Route

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  • SUSAN COLEMAN

    (University of Hartford, West Hartford, CT, USA)

  • CARMEN COTEI

    (University of Hartford, West Hartford, CT, USA)

  • JOSEPH FARHAT

    (Central Connecticut State University, New Britain, CT, USA)

Abstract

This article explores factors affecting the survival and exit routes of new firms created in 2004 using data from the Kauffman Firm Survey. We draw upon the Resource-Based View to test several hypotheses regarding the impact of both tangible and intangible resources on new firm survival in both service and non-service firms. We also distinguish between two types of exit: closures (permanently stopped operations) and mergers or acquisitions. Our results reveal that, although service and non-service firms may differ in terms of industry structure, the fundamental resources that contribute to their survival are the same: education, work and life experience and adequate levels of startup financial capital. In spite of these similarities, our results did reveal industry differences in terms of exit. We found serial entrepreneurs in the service sector were more likely to exit through merger or acquisition. Conversely, intellectual property decreased the likelihood of exit through merger or acquisition for non-service firms. Thus, our findings revealed a link between human capital, industry and exit route for this sample of new firms.

Suggested Citation

  • Susan Coleman & Carmen Cotei & Joseph Farhat, 2013. "A Resource-Based View Of New Firm Survival: New Perspectives On The Role Of Industry And Exit Route," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 18(01), pages 1-25.
    • Handle: RePEc:wsi:jdexxx:v:18:y:2013:i:01:n:s1084946713500027
    DOI: 10.1142/S1084946713500027
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    References listed on IDEAS

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    3. Brian Headd, 2001. "Business Success: Factors Leading to Surviving and Closing Successfully," Working Papers 01-01, Center for Economic Studies, U.S. Census Bureau.
    4. Gary S. Becker, 1975. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition," NBER Books, National Bureau of Economic Research, Inc, number beck75-1, March.
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