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The Development and Survival of New Small Businesses: Empirical Evidence for Scotland 1994-97

This paper has two goals. First, to provide an accurate characterisation of the new small firm in Scotland by reference to markets, finance, costs, business strategy, human capital, internal organisation and technical change. Second, to use these same features to discover salient differences between small firms which either survive or close, two or three years after inception. The empirical evidence is based on interview data from 150 entrepreneurs over a three year period. It was found that surviving firms were larger, better funded, lower geared, and more profit oriented. They also paid higher wages, and were both more attuned to, and realistic about, new technologies. The conclusion formed was that firms which survived generally displayed wider and deeper competencies than firms which closed.

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File URL: http://www.st-andrews.ac.uk/crieff/papers/dp9712.pdf
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Paper provided by Centre for Research into Industry, Enterprise, Finance and the Firm in its series CRIEFF Discussion Papers with number 9712.

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Date of creation: Oct 1997
Date of revision:
Handle: RePEc:san:crieff:9712
Contact details of provider: Postal: School of Economics and Finance, University of St. Andrews, Fife KY16 9AL
Phone: 01334 462420
Fax: 01334 462438
Web page: http://crieff.wordpress.com/

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  1. Gavin C Reid & Lowell R Jacobsen., . "The Small Entrepreneurial Firm," Hume Papers 8, David Hume Institute.
  2. Dobson, Stephen M & Gerrard, Bill J, 1989. "Growth and Profitability in the Leeds Engineering Sector," Scottish Journal of Political Economy, Scottish Economic Society, vol. 36(4), pages 334-52, November.
  3. Julia A Smith, 1997. "The Behaviour and Performance of Young Micro Firms: Evidence from New Businesses in Scotland," CRIEFF Discussion Papers 9711, Centre for Research into Industry, Enterprise, Finance and the Firm.
  4. Coase, R H, 1988. "The Nature of the Firm: Origin," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(1), pages 3-17, Spring.
  5. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
  6. Oi, Walter Y, 1983. "Heterogeneous Firms and the Organization of Production," Economic Inquiry, Western Economic Association International, vol. 21(2), pages 147-71, April.
  7. Reid, Gavin C, 1992. "Scale Economies in Small Entrepreneurial Firms," Scottish Journal of Political Economy, Scottish Economic Society, vol. 39(1), pages 39-51, February.
  8. Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-59, November.
  9. Yellen, Janet L, 1984. "Efficiency Wage Models of Unemployment," American Economic Review, American Economic Association, vol. 74(2), pages 200-205, May.
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