Olof Ejermo
Professor
Entrepreneurship and survival over the business cycle: how do new technology-based firms differ?
Author
Summary, in English
We investigate the survival performance of new technology-based firms (NTBFs) over the business cycle and compare them against other entrepreneurial firms. Our data comprise the entire population of entrepreneurial firms entering the Swedish economy from 1991 to 2002, which we follow until 2007. Discrete-time duration models are employed to investigate whether the business cycle impacts differently on the survival likelihood of NTBFs vis-A -vis other entrepreneurial firms. Our main findings are three. First, NTBFs generally experience a lower hazard rate compared to other entrepreneurial firms, which is interpreted as a sign of their high 'quality.' Second, all entrepreneurial firms are sensitive to and follow a pro-cyclical pattern of survival likelihood over the business cycle. Three, when comparing NTBFs with the broader group of other entrepreneurial firms, we find that NTBFs are more sensitive to business cycle fluctuations. The above results come with a qualification, though. The sensitivity during the business cycle mainly pertains to self-employed NTBFs. Also, NTBFs' higher survivability is only linked to not being characterized as self-employed.
Department/s
- CIRCLE
Publishing year
2014
Language
English
Pages
411-426
Publication/Series
Small Business Economics
Volume
43
Issue
2
Document type
Journal article
Publisher
Springer
Topic
- Social Sciences Interdisciplinary
Keywords
- New technology-based firms
- Exit
- Survival probability
- The business
- cycle
- Discrete-time duration models
- Sweden
Status
Published
ISBN/ISSN/Other
- ISSN: 0921-898X