Growth of New Firms : Which Factors Influence Post-Entry Performance? An Empirical Analysis Based on Swiss Firm Data
The aim of this study is to shed light on the factors which determine the post-entry performance of new firms. It is often argued that new firms are the driving force of structural changes and sometimes they are even characterized as an “engine” of economic growth. Nevertheless, the empirical evidence is mixed. Taking into account the high exit rate of new firms, a specific founding cohort does not contribute substantially to new jobs. In this paper, we analyse the contribution of new firms concerning the ability of creating jobs. Furthermore, we investigate the main determinants of post-entry performance, which we derive from existing theoretical concepts based on industrial economic approaches, learning models and founding characteristics. The endogenous variable is employment development. We test our model with data from the Swiss cohort of start-ups of 1996/1997. The results reveal that the important and robust factors determining the post-entry performance are changes in demand, innovation behaviour, human capital, self-financing, seed capital, consultancy and support, assets, legal form, and motives for founding a new firm, such as the possibility to implement own ideas coming from research at university or to escape from unemployment.
|Date of creation:||Dec 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +41 44 632 42 39
Fax: +41 44 632 12 18
Web page: http://www.kof.ethz.ch
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Evans, David S., 1986.
"Tests of Alternative Theories of Firm Growth,"
86-36, C.V. Starr Center for Applied Economics, New York University.
- Dustmann, Christian & Rochina-Barrachina, María Engracia, 2000. "Selection Correction in Panel Data Models: An Application to Labour Supply and Wages," IZA Discussion Papers 162, Institute for the Study of Labor (IZA).
- Hussinger, Katrin, 2003.
"R&D and Subsidies at the Firm Level: An Application of Parametric and Semi-Parametric Two-Step Selection Models,"
ZEW Discussion Papers
03-63, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Katrin Hussinger, 2008. "R&D and subsidies at the firm level: an application of parametric and semiparametric two-step selection models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(6), pages 729-747.
- Katrin Hussinger, 2004. "R&D and Subsidies at the Firm Level: An Application of Parametric and Semi-Parametric Two-Step Selection Models," Public Economics 0403005, EconWPA.
- Cooper, Arnold C. & Gimeno-Gascon, F. Javier & Woo, Carolyn Y., 1994. "Initial human and financial capital as predictors of new venture performance," Journal of Business Venturing, Elsevier, vol. 9(5), pages 371-395, September.
- Brixy, Udo & Kohaut, Susanne, 1999. " Employment Growth Determinants in New Firms in Eastern Germany," Small Business Economics, Springer, vol. 13(2), pages 155-70, September.
- Newey, W.K. & Powell, J.L. & Walker, J.R., 1990.
"Semiparametric Estimation Of Selection Models: Some Empirical Results,"
9001, Wisconsin Madison - Social Systems.
- Newey, Whitney K & Powell, James L & Walker, James R, 1990. "Semiparametric Estimation of Selection Models: Some Empirical Results," American Economic Review, American Economic Association, vol. 80(2), pages 324-28, May.
- Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
- Thomas Hatzichronoglou, 1997. "Revision of the High-Technology Sector and Product Classification," OECD Science, Technology and Industry Working Papers 1997/2, OECD Publishing.
- Almus, Matthias & Engel, Dirk & Nerlinger, Eric A., 1999. "Wachstumsdeterminanten junger Unternehmen in den alten und neuen Bundesländern: Ein Vergleich zwischen innovativen und nicht-innovativen Unternehmen," ZEW Discussion Papers 99-09, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- P. Hart, 2000. "Theories of Firms' Growth and the Generation of Jobs," Review of Industrial Organization, Springer, vol. 17(3), pages 229-248, November.
- Olsen, Randall J, 1980. "A Least Squares Correction for Selectivity Bias," Econometrica, Econometric Society, vol. 48(7), pages 1815-20, November.
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
- Colombo, Massimo G. & Delmastro, Marco, 2002. "How effective are technology incubators?: Evidence from Italy," Research Policy, Elsevier, vol. 31(7), pages 1103-1122, September.
- Marco Vivarelli, 2004. "Are All the Potential Entrepreneurs So Good?," Small Business Economics, Springer, vol. 23(1), pages 41-49, 08.
- Francis Vella, 1998. "Estimating Models with Sample Selection Bias: A Survey," Journal of Human Resources, University of Wisconsin Press, vol. 33(1), pages 127-169.
- Cécile Wetzels & Aslan Zorlu, 2003. "Wage effects of motherhood: a double selection approach," NIMA Working Papers 22, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
When requesting a correction, please mention this item's handle: RePEc:kof:wpskof:04-97. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.