Firm survival: The role of incubators and business characteristics☆
Introduction
Interest in business creation is now more intense than at any point in the last 30 years. Business incubators seek to boost regional development by fostering business and employment creation (Phan, Siegel, & Wright, 2005). The objective of a business incubator is to create and develop companies or accelerate the creation of successful firms (Bruneel, Ratinho, Clarysse, & Groen, 2012).
This study analyzes the efficiency and impact of incubators on the survival rate of firms that employ them. The study also identifies whether other factors such as degree of business innovation, firm size, sector, and export activity affect firm survival.
A configurational comparative method, fsQCA (Ragin, 1987), allows for meeting these objectives. This method enables researchers to overcome a major limitation of traditional probability-based statistics techniques—namely, the need for large samples—without limiting the study to a few cases or case studies. Generalization of conclusions or implications to a larger population is therefore possible using fsQCA.
Following this introduction, Section 2 contains the theoretical framework. Section 3 describes methodology. Section 4 presents the findings. Section 5 offers discussions with limitations and suggestions for future research.
Section snippets
Firm survival
Literature analyzing firm survival (Box, 2008, Carr et al., 2010, Coeurderoy et al., 2012, Colombelli et al., 2013, Holmes et al., 2010), highlights the importance of the following conditions: firm size, sector, export activity, and innovation intensity. The study examines how these variables affect firm survival, and, mainly, explores the influence of incubators on firm survival.
Data
A 2009 survey of CEOs and managing directors provides the data. This survey yields a sample of 47 firms. These firms operate within the European Business and Innovation Centre of Elche (Alicante, Spain). All firms are less than a kilometer away from the incubator to ensure the support from the incubator. Of these 47 firms, 30 are still active in 2014, whereas 17 are no longer going concerns. Regarding incubators' services, 26 firms receive support from the incubator, and 21 do not. Finally, in
Findings
This section presents results from two different analyses. The first explains which conditions lead firms to the outcome (i.e., survival). The second analyzes the main conditions that lead to absence of survival.
The models for analysis are:
surviv = f(size, tbf, sector, export, incub)
~ surviv = f(size, tbf, sector, export, incub)
Symbol (~) represents the negation of the characteristic; in this case ~ surviv. The first step is to examine the conditions necessary for the outcome. Consistency does not
Discussion
This study examines conditions (firm size, sector, export activity, innovation intensity, and use of incubators) that affect business survival, specially, incubators' impact on firm survival. The study contains a review of the most recent relevant literature on these variables. The analysis employs fsQCA (Ragin, 1987) to identify combinations of causes that lead to firm survival (and non-survival) in the Region of Valencia. Unlike conventional statistical techniques, fsQCA overcomes limitations
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The authors are grateful of the contributions from Kun Huang Huarng, Feng Chia University, and Alicia Mas Tur, Universitat de València for their careful reading and suggestions on revising this essay. Authors also thank César Guzman for his assistance with methodology.