How to Fill the Gap Between Knowledge and Innovation
Edited by Jean Bonnet, Domingo García Pérez De Lima and Howard Van Auken
Jean Bonnet and Nicolas Le Pape INTRODUCTION 9.1 Numerous empirical studies have focused on the relationship between business failure of new firms and industry growth (Audretsch and Mahmood, 1995; Honjo, 2000; Mata et al., 1995). The results are mixed because two opposite conclusions can be drawn: a direct effect when the industry growth creates new opportunities or an increasing demand; an indirect effect when the growing industry generates more instability in the market structure due to stronger competition between established firms and new firms. Few studies have been conducted at the individual level on the behavior of the new entrepreneur and their relationship to the success of the firm. In fact, when dealing with new firms, qualitative information on firms’ strategies is rare and difficult to collect: ‘the analysis of post-entry strategies by start-ups is rather rare in the literature’ (Fosfuri and Giarrantana, 2004, p. 2). This chapter is based on the SINE (information system on new firms) survey which documents the conditions under which 30 778 French firms were founded in 1994 (SINE 94-1). In 1997, 15 550 firms were still running and replied to a second survey (SINE 94-2). The survey collected qualitative information on the real behavior of the firm during the period 1996–7. Then, using duration analysis (Cox model) (Cox, 1972), we determine to what extent the strategic orientation of the firm affects the probability of exit during the period 1997–9 (SINE 94-3). We consider the real behavior of the firm in its product...
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