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The survival of newly founded firms: a case‐study into varying‐coefficient models

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  • Göran Kauermann
  • Gerhard Tutz
  • Josef Brüderl

Abstract

Summary. The success of a newly founded firm depends on various initial risk factors or start‐up conditions such as the market that the business is aiming for, the experience and the age of the founder, the preparation before the launch, the financial frame and the legal form of the firm. These risk factors determine the chance of survival for the venture. However, the effects of these risk factors may change with time. Some effects may vanish whereas others remain constant. We analyse the survival of 1123 newly founded firms in the state of Bavaria, Germany. Our focus is on the investigation of time variation in the effects of risk factors. Time variation is tackled within the framework of varying‐coefficient models, where time smoothly modifies the effects of risk factors. An important issue in our analysis is the separation of risk factors which have time‐varying effects from those which have time constant effects. We make use of the Akaike criterion to separate these two types of risk factor.

Suggested Citation

  • Göran Kauermann & Gerhard Tutz & Josef Brüderl, 2005. "The survival of newly founded firms: a case‐study into varying‐coefficient models," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(1), pages 145-158, January.
    • Handle: RePEc:bla:jorssa:v:168:y:2005:i:1:p:145-158
    DOI: 10.1111/j.1467-985X.2004.00341.x
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    Cited by:

    1. Kamilia Loukil, 2020. "Dynamic Panel Data Analysis Of The Impact Of Intellectual Property Rights On Entrepreneurship In Emerging And Developing Countries," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 5(1), pages 40-48, March.
    2. Djeundje, Viani Biatat & Crook, Jonathan, 2019. "Dynamic survival models with varying coefficients for credit risks," European Journal of Operational Research, Elsevier, vol. 275(1), pages 319-333.
    3. Ryan M. Yonk & Sierra Hoffer & Devin Stein, 2017. "Disincentives To Business Development On The Navajo Nation," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 22(02), pages 1-18, June.
    4. Kamilia LOUKIL, 2020. "Intellectual property rights, human capital and types of entrepreneurship in emerging and developing countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(622), S), pages 21-40, Spring.
    5. Wolfgang Hess & Maria Persson, 2012. "The duration of trade revisited," Empirical Economics, Springer, vol. 43(3), pages 1083-1107, December.
    6. Damien Rousselière, 2019. "A Flexible Approach to Age Dependence in Organizational Mortality: Comparing the Life Duration for Cooperative and Non-Cooperative Enterprises Using a Bayesian Generalized Additive Discrete Time Survi," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(4), pages 829-855, December.
    7. Henrekson, Magnus & Stenkula, Mikael, 2009. "Entrepreneurship and Public Policy," Working Paper Series 804, Research Institute of Industrial Economics.
    8. Göran Kauermann, 2006. "Nonparametric models and their estimation," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(1), pages 137-152, March.
    9. Augustine Yao Dzathor, 2013. "Do Business Demographics Matter to Nascent Venture Performance? A Longitudinal Evidence from the Kauffman Firm Survey," International Journal of Business and Social Research, LAR Center Press, vol. 3(8), pages 44-56, August.
    10. Canello, Jacopo, 2016. "Migrant entrepreneurs and local networks in industrial districts," Research Policy, Elsevier, vol. 45(10), pages 1953-1964.
    11. Augustine Yao Dzathor, 2013. "Do Business Demographics Matter to Nascent Venture Performance? A Longitudinal Evidence from the Kauffman Firm Survey," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 3(8), pages 44-56, August.
    12. Andreas Groll & Gerhard Tutz, 2017. "Variable selection in discrete survival models including heterogeneity," Lifetime Data Analysis: An International Journal Devoted to Statistical Methods and Applications for Time-to-Event Data, Springer, vol. 23(2), pages 305-338, April.
    13. Tutz, Gerhard & Berger, Moritz, 2020. "The effect of explanatory variables on income: A tool that allows a closer look at the differences in income," Econometrics and Statistics, Elsevier, vol. 16(C), pages 28-41.

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