Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/50869 
Authors: 
Year of Publication: 
2004
Series/Report no.: 
KOF Working Papers No. 97
Publisher: 
ETH Zurich, KOF Swiss Economic Institute, Zurich
Abstract: 
The aim of this study is to shed light on the factors which determine the post-entry performance of new firms. It is often argued that new firms are the driving force of structural changes and sometimes they are even characterized as an engine of economic growth. Nevertheless, the empirical evidence is mixed. Taking into account the high exit rate of new firms, a specific founding cohort does not contribute substantially to new jobs. In this paper, we analyse the contribution of new firms concerning the ability of creating jobs. Furthermore, we investigate the main determinants of post-entry performance, which we derive from existing theoretical concepts based on industrial economic approaches, learning models and founding characteristics. The endogenous variable is employment development. We test our model with data from the Swiss cohort of start-ups of 1996/1997. The results reveal that the important and robust factors determining the post-entry performance are changes in demand, innovation behaviour, human capital, self-financing, seed capital, consultancy and support, assets, legal form, and motives for founding a new firm, such as the possibility to implement own ideas coming from research at university or to escape from unemployment.
Subjects: 
New firms
employment growth
performance
JEL: 
L25
J23
D21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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