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Born to be alive? The survival of innovative and non-innovative French micro-start-ups

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Abstract

Based on French data describing the characteristics of entrepreneurs and their projects, this article studies the differences between the determinants of survival for innovative and non-innovative micro-enterprises. We show that the survival of innovative and non-innovative enterprises is linked to personal criteria such as age, gender, belonging to a minority, professional experience and financing sources. Our results also highlight the positive effect of not being alone in the start-up design phase, whereas being involved in a business network after the start-up period has no significant influence. The survival time of innovative enterprises, which is significantly lower than that of the non-innovative ones, seems adversely influenced by the entrepreneur’s previous management experience. Finally, when considering both innovative and non-innovative start-ups, there appears to be a type of “pecking order” as bank financing has a much more positive effect on survival than a personal one, although when focusing solely on innovative ones this difference does not exist.

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Notes

  1. In a second phase of his research, Schumpeter (1942) considered large companies as drivers of innovation, but he still insisted on the entrepreneurial activities carried out by a person to embody the entrepreneurial function in these large organizations.

  2. “Therefore, we will simply define innovation as the setting up of a new production function. This covers the case of a new commodity, as well as those of a new form of organization such as a merger, of the opening up of new markets, and so on” (Schumpeter 1939, p. 84).

  3. On the question of an enterprise's survival versus its activity sector technological regime, see Audretsch (1991), Audretsch (1995) and Agarwal (1998). For a closer focus on the French new technology-based firms, see Delapierre et al. (1998).

  4. The criteria are capital, accounting, industrial experience, management and marketing experience, project planning, counseling, education level, capacity to attract and retain employees, competitive position, macroeconomic environment, age, presence of associates, family culture of the entrepreneurship, and belonging or not to a minority.

  5. SINE: Information System on New Enterprises.

  6. We excluded all partial (3,323) or total (7,582) takeovers of previously active enterprises.

  7. The Commission recommendation of 6 May 2003 concerning the definition of micro-, small and medium-sized enterprises [notified as document no. C(2003) 1422].

  8. We tested for possible multicollinearity between our variables but did not find any as the variance inflation factor values were very close to 1 (see Table 4).

  9. On the 1,095th day (i.e., precisely 3 years after their creation), 47 enterprises had been liquidated (which is 20 times more important than on any other day); this date was chosen for tax and administrative reasons. This explains the visible scale effect at this date.

  10. They themselves are confirmed by the results of the control model shown in Table 3.

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Acknowledgments

We woud like to thank Jully Jeunet, Gwenaël Piaser and Eric Strobl for their support and valuable comments.

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Authors and Affiliations

  1. IPAG-LAB, 184, Boulevard Saint Germain, 75006, Paris, France

    Tristan Boyer

  2. IEP Strasbourg, EM Strasbourg Business School, Strasbourg, France

    Régis Blazy

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  1. Tristan Boyer
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  2. Régis Blazy
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Correspondence to Tristan Boyer.

Appendix

Appendix

See Tables 3 and 4.

Table 3 Results of the Cox regression for the control model
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Table 4 Multicollinearity test
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Boyer, T., Blazy, R. Born to be alive? The survival of innovative and non-innovative French micro-start-ups. Small Bus Econ 42, 669–683 (2014). https://doi.org/10.1007/s11187-013-9522-8

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