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

Author

Listed:
  • Hannu Littunen
  • Esa Storhammar
  • Tuomo Nenonen

Abstract

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.

Suggested Citation

  • Hannu Littunen & Esa Storhammar & Tuomo Nenonen, 1998. "The survival of firms over the critical first 3 years and the local environment," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 10(3), pages 189-202, January.
    • Handle: RePEc:taf:entreg:v:10:y:1998:i:3:p:189-202
    DOI: 10.1080/08985629800000011
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    Citations

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    Cited by:

    1. Calá, Carla Daniela, 2015. "Firm dynamics in developing countries: a single policy for all regions?," Nülan. Deposited Documents 2650, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    2. Brouwer Aleid & Pellenbarg Pieter, 2011. "The Importance of Place in Corporate Identity an Investigation on the Presence of Old Dutch Firms on the Internet," European Spatial Research and Policy, Sciendo, vol. 18(2), pages 79-94, November.
    3. Harold Fried & Loren Tauer, 2015. "An entrepreneur performance index," Journal of Productivity Analysis, Springer, vol. 44(1), pages 69-77, August.
    4. Carla Daniela Calá & Miguel Manjón-Antolín & Josep-Maria Arauzo-Carod, 2017. "Regional Determinants of Exit Across Firms’ Size: Evidence from Argentina," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 108(6), pages 768-785, December.
    5. Miettinen Marika Rosanna & Littunen Hannu, 2013. "Factors Contributing to the Success of Start-Up Firms Using Two-Point or Multiple-Point Scale Models," Entrepreneurship Research Journal, De Gruyter, vol. 3(4), pages 449-481, June.
    6. Calá, Carla Daniela, 2018. "Sectoral and regional determinants of firm dynamics in developing countries: evidence for low-, mediumand high-tech manufacturing in Argentina," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    7. Savvas Papagiannidis & Feng Li & Henry Etzkowitz & Michael Clouser, 2009. "Entrepreneurial networks: A Triple Helix approach for brokering human and social capital," Journal of International Entrepreneurship, Springer, vol. 7(3), pages 215-235, September.
    8. Calá, Carla Daniela, 2014. "Regional issues on firm entry and exit in Argentina: core and peripheral regions," Nülan. Deposited Documents 2023, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    9. Calá, Carla Daniela & Manjón-Antolín, Miguel & Arauzo-Carod, Josep-Maria, 2017. "Regional determinants of exit across firms' size: evidence from a developing country," Nülan. Deposited Documents 2548, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    10. Calá, Carla Daniela & Manjón-Antolín, Miguel & Arauzo-Carod, Josep-Maria, 2014. "The determinants of exit in Argentina: core and peripheral regions," Nülan. Deposited Documents 1976, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    11. Khelil, Nabil, 2016. "The many faces of entrepreneurial failure: Insights from an empirical taxonomy," Journal of Business Venturing, Elsevier, vol. 31(1), pages 72-94.
    12. Franczak, Jennifer & Gyensare, Michael A. & Lanivich, Stephen E. & Adomako, Samuel & Chu, Irene, 2024. "How and when does founder polychronicity affect new venture performance? The roles of entrepreneurial orientation and firm age," Journal of Business Research, Elsevier, vol. 172(C).
    13. Marco Cantamessa & Valentina Gatteschi & Guido Perboli & Mariangela Rosano, 2018. "Startups’ Roads to Failure," Sustainability, MDPI, vol. 10(7), pages 1-19, July.
    14. Rui Baptista & Murat Karaöz & Joana Mendonça, 2014. "The impact of human capital on the early success of necessity versus opportunity-based entrepreneurs," Small Business Economics, Springer, vol. 42(4), pages 831-847, April.
    15. Ali Smida & Nabil Khelil, 2010. "Repenser l’échec entrepreneurial des petites entreprises émergentes," Post-Print halshs-02505930, HAL.
    16. Carla Calá & Josep-Maria Arauzo-Carod & Miguel Manjón-Antolín, 2015. "The determinants of exit in a developing country: core and peripheral regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 927-944, May.
    17. Sahar Ayadi & Sonia Zouari Ghorbel, 2018. "Relevance of the Mann Whitney Wilcoxon test in the survival analysis of newly established companies in Tunisia (Case of the sfax region)," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 8(1), pages 1-20, December.

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