The survival of firms over the critical first 3 years and the local environment

The aim of this study was to examine the success of new firms in different environments and the factors affecting it. In this study the criterion of a successful firm is that of continued functioning, and firms are divided into two groups: those that have closed down and those that continue after th...

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Bibliographic Details
Published in:Entrepreneurship and regional development 1998-01, Vol.10 (3), p.189-202
Main Authors: Littunen, Hannu, Storhammar, Esa, Nenonen, Tuomo
Format: Article
Language:English
Subjects:
critical years
Entrepreneurs
Entrepreneurship
environment
Local economy
new firms
success
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Summary:The aim of this study was to examine the success of new firms in different environments and the factors affecting it. In this study the criterion of a successful firm is that of continued functioning, and firms are divided into two groups: those that have closed down and those that continue after the critical first 3 years. As the basis for a regional analysis the authors look first at the differences between these two groups in terms of the characteristics of firms and entrepreneurs. The regional distribution of the firms that closed down is then examined, followed by an analysis of the regional differences in the characteristics of all the firms and entrepreneurs studied. Regional differences were found in the closing down of firms as well as in the factors explaining the continuation/closing down of business activities. Explanations for the success of firms were found in the characteristic of the entrepreneur, the success of the start-up phase, and in the characteristics of the firm itself. The effects of the environment on firms can thus be seen through these variables.
ISSN:0898-5626
1464-5114
DOI:10.1080/08985629800000011