Start-up Survival and Management Capability: A Longitudinal Study of Micro-enterprises

Abstract

This study reports on the results of a longitudinal study into management capability and its relationship with new venture survival/failure. In order to compare the experiences of surviving versus failed businesses, the researchers tracked 115 “surviving” microenterprises that had been launched during the 1997–99 period, as well as another 69 that had failed during this period. The findings supported the role of management capability, especially in marketing, in enhancing the survivability of these new micro-enterprises. Also, survivors demonstrated initial overconfidence in their management capabilities. Implications of the study are discussed and directions for future research proposed.