Influence of human and physical capital on the survival of new ventures

Abstract

The purpose of this study is to analyze the influence of physical and human capital on the survival of new ventures in different economic contexts. We conduct an empirical study by using a logit model to analyze new ventures’ probabilities of survival. The results show that both human and physical capital influence the survival of ventures in the short and long term, with human capital playing a particularly important role. The implications of the study hinge on two key findings. First, the government’s potential to promote more efficient forms of entrepreneurship is a prominent factor. Second, the motivations —necessity or opportunity—of the entrepreneurs embarking on business ventures, and the importance of certain types of capital also determine the venture’s prospects for survival.