Coad, Alex, Frankish, Julian S, Roberts, Richard G and Storey, David J (2016) Predicting new venture survival and growth: does the fog lift? Small Business Economics, 47 (1). pp. 217-241. ISSN 0921-898X

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Abstract

This paper investigates whether new venture performance becomes easier to predict as the venture ages: does the fog lift? To address this question we primarily draw upon a theoretical framework, initially formulated in a managerial context by Levinthal (Adm Sci Q 36(3):397–420, 1991) that sees new venture sales as a random walk but survival being determined by the stock of available resources (proxied by size). We derive theoretical predictions that are tested with a 10-year cohort of 6579 UK new ventures in the UK. We observe that our ability to predict firm growth deteriorates in the years after entry—in terms of the selection environment, the ‘fog’ seems to thicken. However, our survival predictions improve with time—implying that the ‘fog’ does lift.

Item Type:	Article
Schools and Departments:	University of Sussex Business School > SPRU - Science Policy Research Unit
Depositing User:	Nikoleta Kiapidou
Date Deposited:	20 Apr 2016 09:29
Last Modified:	02 Jul 2019 20:08
URI:	http://sro.sussex.ac.uk/id/eprint/60555

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