Growth paths and survival chances: An application of Gambler's Ruin theory

Alex Coad, Julian Frankish, Richard G. Roberts, David J. Storey

研究成果: Article査読

107 被引用数 (Scopus)

抄録

This paper links new firm survival with growth, with a focus on the patterns in firms' growth paths. We theorise a Gambler's Ruin framework by arguing that new firm performance is best modelled as a random walk process, but that survival is nonrandom and depends primarily on the stock of accumulated resources. A firm's resources are either there when the business begins or are generated by successful periods - 'wins'. The empirical section tracks, over six years, the sales and survival/non-survival of 6247 UK start-ups which all began trading in the same quarter of 2004. We do not find strong evidence in favour of a taxonomy of growth paths, because we observe that every possible growth path seems to occur with roughly equal probability. However, we observe that growth paths influence subsequent survival. Controlling for lagged size, we observe that longer lags of growth, and even start-up size, have significant effects on survival.

本文言語English
ページ(範囲)615-632
ページ数18
ジャーナルJournal of Business Venturing
28
5
DOI
出版ステータスPublished - 2013 9
外部発表はい

ASJC Scopus subject areas

  • Business and International Management
  • Management of Technology and Innovation

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