Entrepreneurship and the determinants of firm survival within regions: human capital, growth motivation and locational conditions

Abstract

Despite a growing body of research on firm survival, little is known about the factors impacting upon survival rates at a micro-spatial level. This study, therefore, analyses firm survival across local environments in the context of a peripheral region; namely, the case of Wales in the UK. It examines how theories relating to human capital, growth motivation and locational conditions may explain survival within a region. Drawing on data of survival patterns for a cohort of firms, it is found that each of the three theories at least partly explain firm survival, with it being clear that human capital relating to the experience of entrepreneurs, as well as the growth motivation of their firms resulting from the strategic choices they make, impact upon rates of survival. It is also found that the local environment contributes to the likelihood of its survival. In particular, it is found that locational factors have a potential influence on the human capital allocated to enterprise, as well as how this capital is utilised via growth motivation. This suggests that not only do locational factors contribute to differing rates of entrepreneurship, but that such factors also impact on the durability of firms over time. Abstract Despite a growing body of research on firm survival, little is known about the factors impacting upon survival rates at a micro-spatial level. This study, therefore, analyses firm survival across local environments in the context of a peripheral region; namely, the case of Wales in the UK. It examines how theories relating to human capital, growth motivation and locational conditions may explain survival within a region. Drawing on data of survival patterns for a cohort of firms, it is found that each of the three theories at least partly explain firm survival, with it being clear that human capital relating to the experience of entrepreneurs, as well as the growth motivation of their firms resulting from the strategic choices they make, impact upon rates of survival. It is also found that the local environment contributes to the likelihood of its survival. In particular, it is found that locational factors have a potential influence on the human capital allocated to enterprise, as well as how this capital is utilised via growth motivation. This suggests that not only do locational factors contribute to differing rates of entrepreneurship, but that such factors also impact on the durability of firms over time.

Individual capital and social entrepreneurship: Role of formal institutions

“…Secondly, we contextualize the effect of individual capital on social entrepreneurship entry by integrating capital theory with institutional theory. We thereby contribute to the theoretical discussion around how individual capital and institutional conditions jointly influence entrepreneurship entry (De Clercq et al, 2013;Estrin et al, 2016;Huggins, Prokop, & Thompson, 2017;Stephan et al, 2016;Terjesen et al, 2016) with a specific focus on social entrepreneurship. By employing a multilevel approach, we highlight that formal institutional context acts as a critical contingency on the relationship between individual capital and social entrepreneurship entry.…”

“…However, given the lack of alternate largescale databases on social entrepreneurship (Lee, Battilana, & Wang, 2014;Lepoutre et al, 2013), the GEM database with these inherent data limitations was the best suited for the research question of interest to us. Our research was focused on the role of formal institutions at the national level, but we know that institutional characteristics could vary between subnational regions (Huggins et al, 2017;Naudé, Gries, Wood, & Meintjies, 2008). Hence, future research could explore the role of sub-national institutions on social entrepreneurship.…”

Why are some graduate entrepreneurs more innovative than others? The effect of human capital, psychological factor and entrepreneurial rewards on entrepreneurial innovativeness

“…In other words, graduates have individual performance thresholds that must be met for the justification of the opportunity costs in accordance with the human capital they have (Huggins et al 2017). High rewards are generally associated with high innovation behavior in opportunity exploitation, suggesting that students with high human capital need to act on opportunities more innovatively.…”

Does Love Money Affect Vocational Behavior? Empirical Evidence from Italian Entrepreneurs

“…They require strong commitment and involvement by individuals who try to achieve these goals. However, differently from other studies, the core goal considered herein is the survival of the firm (Suarez & Utterback, 1995;Westhead, 1995;Agarwal, 1997;Gimeno et al, 1997;Ireland et al, 2005;Sapienza et al, 2006;Santarelli & Vivarelli, 2007;Geroski et al, 2010;Delmar et al, 2013;Huggins et al, 2017) that can be considered a marker of efficiency achieved (Agarwal, 1997) and stands for the ability to overcome liability of smallness (Freeman et al, 1983) and of newness (Stinchcombe, 1965;Hannan & Freeman, 1984). Differently from growth, which is affected by external factors, such as competition and dynamics of the market (Smolarski & Kut, 2011), survival seems to depend on other factors that are innovativeness (Hyytinen et al, 2015) or support offered by stakeholder (Pajunen, 2006;Korunka et al, 2010;Kessler et al, 2012;Au et al, 2016).…”