Small Firms' Actions and their Survival Probabilities
The small firm is viewed as taking a complex of actions to facilitate market place survival. Selection of such actions involves choice about markets, costs, strategy, finance, organisation, human capital and innovation. Probit models of survival over two years are estimated for a random sample of 150 new businesses for which field work evidence on complex actions is available. Although many actions are found to play at least some role in promoting survival of the small firm, a parsimonious empirical model is presented which emphasises just ten actions. this model indicates the pivotal imortance of reward to the entrepreneurial input, allied to a tight control of the overall wage bill, if the small firm is successful to negotiate the early stage of its life cycle.
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