Abstract
ABSTRACT This paper constructs a theoretical framework that explains how exposure to entrepreneurial activities impacts start-ups’ survival. First, this study examines the effects of entrepreneurial capital (EC) – inherited entrepreneurial practices from parents as a result of the exposure to entrepreneurial activities, on the survival of start-ups. Second, it examines the effects of EC across firm types (family and non-family firm) and regions (smaller and larger region). Using a sample of start-ups in 2002 in Sweden, we found first that EC influences the survival of start-ups, especially start-ups in smaller regions. Further, we found that EC conditions the survival of family start-ups. This paper adds to the literature by opening the discussions on the survival of start-ups and EC. We provide policy implications thereafter.
Highlights
Entrepreneurship is one of the major strategies by governments all over the world to promote economic growth in lagging and smaller regions, but in most circumstances with limited success
The present study investigated how the exposure to entrepreneurial activities may be a critical factor for start-ups survival
We drew on theories of entrepreneurship and growth to postulate a set of hypotheses related to how parental entrepreneurial knowledge transfer will impact the survival of start-ups across space
Summary
Entrepreneurship is one of the major strategies by governments all over the world to promote economic growth in lagging and smaller regions, but in most circumstances with limited success. Studies show that certain regional factors, albeit measured in somewhat different ways, explain a large share of variations in start-ups’ survival Factors such as population growth and density, economic diversity, share of small firms, industry density, and entrepreneurial culture influence the formation of new firms (Armington & Acs, 2002; Westlund et al, 2014). What is absent in the literature is the empirical evidence on how the entrepreneurial capabilities acquired from self-employed or entrepreneurs in urban and rural regions may affect the survival rates of start-ups. We formulate the following hypothesis: Hypothesis 2: Having a parent (or both) involved in entrepreneurial activity (EC) has a positive impact on the survival of start-ups in smaller or rural areas.
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