Untangling the relationships among growth, profitability and survival in new firms
Författare
Summary, in English
The performance of new firms is important for economic development but research has produced limited knowledge about the key relationships among growth, profitability, and survival for new firms. Based on evolutionary theory, we develop a model about how new firms resolve uncertainty about their ability to prosper in a market by monitoring changes in profitability. Our model predicts selection pressures to weed out underperforming firms and learning in order to allow survivors to improve performance and grow. We test our theory using a unique panel of knowledge-intensive new firms in Sweden. We find strong support for the notion that profitability enhances both survival and growth, and growth helps profitability but has a negative effect on survival. Implications are discussed. (C) 2013 Elsevier Ltd. All rights reserved.
Avdelning/ar
Publiceringsår
2013
Språk
Engelska
Sidor
276-291
Publikation/Tidskrift/Serie
Technovation; The International Journal of Technological Innovation, Entrepreneurship and Technology Management
Volym
33
Issue
8-9
Länkar
Dokumenttyp
Artikel i tidskrift
Förlag
Elsevier
Ämne
- Business Administration
Nyckelord
- Growth
- New firms
- Survival
- Firm evolution
- Kirchoff
Status
Published
ISBN/ISSN/Övrigt
- ISSN: 0166-4972