Startups survival, Resourse Based View, QCA methodology
By analyzing the empirical literature that uses the RBV to study the influence of internal factors on start-up survival (Esteve-Pérez and Mañez-Castillejo 2008) we noted that scholars have emphasized the importance of the following five internal resources: 1) R&D activity (Esteve-Pérez and Mañez-Castillejo 2008; Yang et al. 2017); 2) advertising activity (Esteve-Pérez and Mañez-Castillejo 2008); 3) export activity (Esteve-Pérez and Mañez-Castillejo 2008); 4) human capital (Geroski et al. 2010; Yang et al. 2017); and 5) financial resources (Coleman et al. 2013; Yang et al. 2017
The literature has underestimated whether synergistic interactions among these internal resources have an influence on startups survival (Yang et al. 2017). Several scholars building on RBV perspectives (Barney 1991; Wernerfelt 1984) argue that firms’ internal resources contribute to start-ups’ survival especially when they can be used in combinations.
Which interactions among which firms’ internal resources affect start-up survival?
To address our research question we use a specific QCA technique named fuzzy-set qualitative comparative analysis (fsQCA). First, this methodology allows us to analyze causal relationships between configurations or combinations of resources (internal resources) and an outcome of interest (i.e. survival of start-ups) (Ragin 2008; Schneider and Wagemann 2012). Second, QCA is receiving increasing attention from management (Kan et al. 2016; Rey-Martí et al. 2016) and innovation scholars (Kraus et al. 2018).
We gathered information from all the Italian accelerators that accelerated a start-up cohort in 2013: B-Ventures, Luiss Enlabs, Nanabianca, Seedlab and iStarter. In September 2017 we developed an ad hoc questionnaire for this study, in which we asked several questions about the internal resources of the start-ups, including data on R&D activity, advertising activity, export activity, and human capital. Before sending the questionnaire, we contacted two accelerator managers in order to obtain useful feedback for our research and to validate our questionnaire. Subsequently, we revised the questionnaire and presented it to the 5 Italian accelerators active since 2013. In November 2017 we collected, through SurveyMonkey, answers to our questionnaire from the CEOs of 30 start-ups accelerated in 2013. We received 8 missing answers by telephone in December 2017.
The outcome of this procedure allowed us to gather information on 38 start-ups accelerated by the 5 accelerators. Information about these start-ups refer to 2013. To corroborate the accuracy of this information we also searched qualitative information from the Internet, such as news, data from corporate websites and specialized magazines and journals.
From the results obtained from fsQCA we can state that the answer to our research question "Which interactions among which firms’ internal resources affect start-up survival?" is the combined interaction between export activity and human capital. On one hand, the interaction between these two resources amplifies the effect of the learning by exporting on start-up survival. In fact, highly qualified workers are able to process new knowledge accessed by the start-up through the export activity (Kotha et al. 2013). On the other hand, export activity provides the knowledge necessary to exploit the potential of qualified human capital
Contribution to Scholarship
First, we contributed to the RBV (Barney 1991; Wernerfelt 1984) by highlighting the importance of the combined use of internal resources for start-up survival (Newbert 2007).
Second, we also contributed to the literature on international trade (Eliasson et al. 2012; Esteve-Pérez and Mañez-Castillejo 2008). The presence of a high level of human capital temporally accelerates the positive effect of the learning by exporting mechanism on firm survival, thereby contributing to previous research that claimed longer periods of time (Esteve-Pérez et al. 2008; Greenaway and Kneller 2007).
Third, we contributed to the literature on human capital (Arribas and Vila 2007; Kungwansupaphan and Siengthai 2014) by showing that the presence of export activity amplifies the impact of human capital on start-up survival.
Contribution to Practice
Not yet provided
This paper explores startups survival, which is one of the challenges of innovation. Moreover we explore such topic in the context of business accelerators, which are considered as by scholars (Puwels et al. 2016; Battistella et al. 2017) as an Open environment.
Acs, Z. J., & Szerb, L. (2007). Entrepreneurship, economic growth and public policy. Small Business Economics, 28(2-3), 109–122.
Agarwal, R., & Audretsch, D. B. (2001). Does entry size matter? The impact of the life cycle and technology on firm survival. The Journal of Industrial Economics, 49(1), 21–43.
Albornoz, F., Fanelli, S., & Hallak, J. C. (2016). Survival in export markets. Journal of International Economics, 102, 262–281.
Albort-Morant, G., & Oghazi, P. (2016). How useful are incubators for new entrepreneurs? Journal of Business Research, 69(6), 2125–2129.
Audretsch, D. B. (2002). The Dynamic Role of Small Firms: Evidence from the US. Small Business Economics, 18(1-3), 13–40.
Audretsch, D. B., Segarra, A., & Teruel, M. (2014). Why don't all young firms invest in R&D? Small Business Economics, 43(4), 751–766.
Aversa, P., Furnari, S., & Haefliger, S. (2015). Business model configurations and performance: A qualitative comparative analysis in Formula One racing, 2005–2013. Industrial and Corporate Change, 24(3), 655–676.
Baptista, R., Karaöz, M., & Mendonça, J. (2014). The impact of human capital on the early success of necessity versus opportunity-based entrepreneurs. Small Business Economics, 42(4), 831–847.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.
Bates, T. (1990). Entrepreneur human capital inputs and small business longevity. The Review of Economics and Statistics, 72(4), 551–559.
Beckman, C.M., Eisenhardt, K., Kotha, S., Meyer, A. & Rajagopalan, N. (2012). The role of the entrepreneur in technology entrepreneurship. Strategic Entrepreneurship Journal, 6(3), 203–206.
Belso-Martinez, J. A., Molina-Morales, F. X., & Mas-Verdu, F. (2013). Combining effects of internal resources, entrepreneur characteristics and KIS on new firms. Journal of Business Research, 66(10), 2079–2089.
Bernard, A. B., Eaton, J., Jensen, J. B., & Kortum, S. (2003). Plants and productivity in international trade. American Economic Review, 93(4), 1268–1290.
Block, J. H., Colombo, M. G., Cumming, D. J., & Vismara, S. (2018). New players in entrepreneurial finance and why they are there. Small Business Economics, 50(2), 239–250.
Boyer, T., & Blazy, R. (2014). Born to be alive? The survival of innovative and non-innovative French micro-start-ups. Small Business Economics, 42(4), 669–683.
Burton, M.D., & Beckman, C.M. (2007). Leaving a legacy: position imprints and successor turnover in young firms. American Sociological Review 72(2), 239–266.
Cabrer-Borrás, B., & Belda, P. R. (2018). Survival of entrepreneurship in Spain. Small Business Economics, 51(1), 265–278.
Cavusgil, S. T., & Knight, G. (2015). The born global firm: An entrepreneurial and capabilities perspective on early and rapid internationalization. Journal of International Business Studies, 46(1), 3–16.
Clarysse, B., & Yusubova, A. (2014). Success factors of business accelerators. In Technology Business Incubation Mechanisms and Sustainable Regional Development, Proceedings.
Cohen, S., & Hochberg, Y.V. (2014). Accelerating startups: The Seed Accelerator Phenomenon. Available at SSRN.
Cohen, W., & Levinthal, D. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35, 128–152.
Coleman, S., Cotei, C., & Farhat, J. (2013). A resource-based view of new firm survival: new perspectives on the role of industry and exit route. Journal of Developmental Entrepreneurship, 18(1), 1350002.
Colombelli, A., Krafft, J., & Vivarelli, M. (2016). To be born is not enough: the key role of innovative start-ups. Small Business Economics, 47(2), 277–291.
Colombo, M. G., & Delmastro, M. (2001). Technology-based entrepreneurs: does internet make a difference? Small Business Economics, 16(3), 177–190.
Cooper, A. C., Gimeno-Gascon, F. J., & Woo, C. Y. (1994). Initial human and financial capital as predictors of new venture performance. Journal of Business Venturing, 9(5), 371–395.
Criscuolo, P., Nicolaou, N., & Salter, A. (2012). The elixir (or burden) of youth? Exploring differences in innovation between start-ups and established firms. Research Policy, 41(2), 319–333.
Czarnitzki, D., & Toole, A. A. (2013). The R&D investment–uncertainty relationship: do strategic rivalry and firm size matter? Managerial and Decision Economics, 34(1), 15–28.
Davidsson, P., & Honig, B. (2003). The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing, 18(3), 301–331.
Denrell, J., Fang, C., & Winter, S. G. (2003). The economics of strategic opportunity. Strategic Management Journal, 24(10), 977-–990.
Devece, C., Peris-Ortiz, M., & Rueda-Armengot, C. (2016). Entrepreneurship during economic crisis: Success factors and paths to failure. Journal of Business Research, 69(11), 5366–5370.
D'souza, D. E., & McDougall, P. P. (1989). Third world joint venturing: a strategic option for the smaller firm. Entrepreneurship Theory and Practice, 13(4), 19–34.
Ebert, T., Brenner, T., & Brixy, U. (2018). New firm survival: The interdependence between regional externalities and innovativeness. Small Business Economics, 1-23. https://doi.org/10.1007/s11187-018-0026-4.
Eklund, J., Levratto, N., & Ramello, G. B. (2018). Entrepreneurship and failure: two sides of the same coin? Small Business Economics, 1–10. https://doi.org/10.1007/s11187-018-0039-z.
Eliasson, K., Hansson, P., & Lindvert, M. (2012). Do firms learn by exporting or learn to export? Evidence from small and medium-sized enterprises. Small Business Economics, 39(2), 453–472.
Ericson, R., & Pakes, A. (1995). Markov-perfect industry dynamics: A framework for empirical work. The Review of Economic Studies, 62(1), 53–82.
Esteve-Pérez, S., & Mañez-Castillejo, J. A. (2008). The resource-based theory of the firm and firm survival. Small Business Economics, 30(3), 231–249.
Esteve-Pérez, S., Mañez-Castillejo, J. A., & Sanchis-Llopis, J. A. (2008). Does a “survival-by-exporting” effect for SMEs exist? Empirica, 35(1), 81–104.
Fiss, P. C. (2007). A set-theoretic approach to organizational configurations. Academy of Management Review, 32(4), 1180–1198.
Fiss, P. C., Sharapov, D., & Cronqvist, L. (2013) Opposites attract? Opportunities and challenges for integrating large-N QCA and econometric analysis. Political Research Quarterly 66(1),191–198.
Fornell, C., Mithas, S., Morgeson III, F. V., & Krishnan, M. S. (2006). Customer satisfaction and stock prices: High returns, low risk. Journal of Marketing, 70(1), 3–14.
Galbreath, J. (2005). Which resources matter the most to firm success? An exploratory study of resource-based theory. Technovation, 25(9), 979–987.
Ganotakis, P. (2012). Founders’ human capital and the performance of UK new technology based firms. Small Business Economics, 39(2), 495–515.
Gartner, W. B., Frid, C. J., & Alexander, J. C. (2012). Financing the emerging firm. Small Business Economics, 39(3), 745–761.
Geroski, P. A. (1995). What do we know about entry? International Journal of Industrial Organization, 13(4), 421–440.
Geroski, P. A., Mata, J., & Portugal, P. (2010). Founding conditions and the survival of new firms. Strategic Management Journal, 31(5), 510–529.
Greenaway, D., & Kneller, R. (2007). Industry differences in the effect of export market entry: learning by exporting? Review of World Economics, 143(3), 416–432.
Grossman, G. M., & Helpman, E. (1991). Trade, knowledge spillovers, and growth. European Economic Review, 35(2-3), 517–526.
Grossman, G.M., & Helpman E. (1993). Innovation and Growth in the Global Economy. Cambridge, MA: MIT Press.
Highfield, R., & Smiley, R. (1987). New business starts and economic activity: An empirical investigation. International Journal of Industrial Organization, 5(1), 51–66.
Hormiga, E., Batista‐Canino, R. M., & Sánchez‐Medina, A. (2011). The Impact of Relational Capital on the Success of New Business Start‐Ups. Journal of Small Business Management, 49(4), 617–638.
Hot Topics (2015). https://www.hottopics.ht/17202/100-leaders-of-top-tech-accelerators/ Accessed 01.05.2017.
Huggins, R., Prokop, D., & Thompson, P. (2017). Entrepreneurship and the determinants of firm survival within regions: human capital, growth motivation and locational conditions. Entrepreneurship & Regional Development, 29(3-4), 357–389.
Hult, G. T. M., & Ketchen, D. J. (2001). Does market orientation matter?: A test of the relationship between positional advantage and performance. Strategic Management Journal, 22(9), 899–906.
Jindal, N., & McAlister, L. (2015). The impacts of advertising assets and R&D assets on reducing bankruptcy risk. Marketing Science, 34(4), 555–572.
Joshi, A., & Hanssens, D. M. (2004). Advertising spending and market capitalization. MSI Report, (04-110).
Kan, A. K. S., Adegbite, E., El Omari, S., & Abdellatif, M. (2016). On the use of qualitative comparative analysis in management. Journal of Business Research, 69(4), 1458–1463.
Kato, M., Okamuro, H., & Honjo, Y. (2015). Does Founders' Human Capital Matter for Innovation? Evidence from Japanese Start‐ups. Journal of Small Business Management, 53(1), 114–128.
Kotha, R., George, G., & Srikanth, K. (2013). Bridging the mutual knowledge gap: Coordination and the commercialization of university science. Academy of Management Journal, 56(2), 498–524.
Kraus, S., Ribeiro-Soriano, D., & Schüssler, M. (2018). Fuzzy-set qualitative comparative analysis (fsQCA) in entrepreneurship and innovation research–the rise of a method. International Entrepreneurship and Management Journal, 14(1), 15–33.
Lee, S. Y., Florida, R., & Acs, Z. (2004). Creativity and entrepreneurship: A regional analysis of new firm formation. Regional Studies, 38(8), 879–891.
Lin, P. C., & Huang, D. S. (2008). Technological regimes and firm survival: Evidence across sectors and over time. Small Business Economics, 30(2), 175–186.
Mas-Verdú, F., Ribeiro-Soriano, D., & Roig-Tierno, N. (2015). Firm survival: The role of incubators and business characteristics. Journal of Business Research, 68(4), 793–796.
Mata, J., & Portugal, P. (2002). The survival of new domestic and foreign‐owned firms. Strategic Management Journal, 23(4), 323-343.
Mian, S., Lamine, W., & Fayolle, A. (2016). Technology business incubation: An overview of the state of knowledge. Technovation, 50, 1–12.
Mudambi, R., & Zahra, S. A. (2007). The survival of international new ventures. Journal of International Business Studies, 38(2), 333–352.
Newbert, S. L. (2007). Empirical research on the resource‐based view of the firm: an assessment and suggestions for future research. Strategic Management Journal, 28(2), 121–146.
Pauwels, C., Clarysse, B., Wright, M., & Van Hove, J. (2016). Understanding a new generation incubation model: The accelerator. Technovation, 50, 13–24.
Pennings, J. M., Lee, K., & Van Witteloostuijn, A. (1998). Human capital, social capital, and firm dissolution. Academy of Management Journal, 41(4), 425–440.
Picken, J. C. (2017). From startup to scalable enterprise: Laying the foundation. Business Horizons, 60(5), 587–595.
Porter, M. E. (1980). Industry structure and competitive strategy: Keys to profitability. Financial Analysts Journal, 36(4), 30–41.
Ragin, C. (1987). The comparative method: Moving beyond qualitative and quantitative methods. Berkeley: University of California.
Ragin, C. (2000). Fuzzy-Set Social Science. Chicago, The University of Chicago Press.
Ragin, C. C. (2006). How to lure analytic social science out of the doldrums: Some lessons from comparative research. International Sociology, 21(5), 633–646.
Ragin, C. C. (2008). Redesigning social inquiry: Fuzzy sets and beyond. Chicago: University of Chicago Press.
Ramaswami, S. N., Srivastava, R. K., & Bhargava, M. (2009). Market-based capabilities and financial performance of firms: insights into marketing’s contribution to firm value. Journal of the Academy of Marketing Science, 37(2), 97–116.
Salomon, R. M., & Shaver, J. M. (2005). Learning by exporting: new insights from examining firm innovation. Journal of Economics & Management Strategy, 14(2), 431–460.
Sapienza, H. J., Autio, E., George, G., & Zahra, S. A. (2006). A capabilities perspective on the effects of early internationalization on firm survival and growth. Academy of Management Review, 31(4), 914–933.
Sarasvathy, S. D., Menon, A. R., & Kuechle, G. (2013). Failing firms and successful entrepreneurs: Serial entrepreneurship as a temporal portfolio. Small Business Economics, 40(2), 417–434.
Schäfer, D., & Talavera, O. (2009). Small business survival and inheritance: evidence from Germany. Small Business Economics, 32(1), 95–109.
Schneider, C. Q., & Wagemann, C. (2010). Standards of good practice in qualitative comparative analysis (QCA) and fuzzy-sets. Comparative Sociology, 9(3), 397–418.
Schneider, C. Q., & Wagemann, C. (2012). Set-theoretic methods for the social sciences: A guide to qualitative comparative analysis. Cambridge: Cambridge University Press.
Schwartz, M. (2013). A control group study of incubators’ impact to promote firm survival. The Journal of Technology Transfer, 38(3), 302–331.
Semrau, T., & Hopp, C. (2016). Complementary or compensatory? A contingency perspective on how entrepreneurs’ human and social capital interact in shaping start-up progress. Small Business Economics, 46(3), 407–423.
Sperber, S., & Linder, C. (2018). Gender-specifics in start-up strategies and the role of the entrepreneurial ecosystem. Small Business Economics, 1–14. https://doi.org/10.1007/s11187-018-9999-2.
Stearns, T. M., Carter, N. M., Reynolds, P. D., & Williams, M. L. (1995). New firm survival: industry, strategy, and location. Journal of Business Venturing, 10(1), 23–42.
Strotmann, H. (2007). Entrepreneurial survival. Small Business Economics, 28(1), 87–104.
Subramaniam, M., & Youndt, M. A. (2005). The influence of intellectual capital on the types of innovative capabilities. Academy of Management Journal, 48(3), 450–463.
Sui, S., & Baum, M. (2014). Internationalization strategy, firm resources and the survival of SMEs in the export market. Journal of International Business Studies, 45(7), 821–841.
Tavassoli, S., & Carbonara, N. (2014). The role of knowledge variety and intensity for regional innovation. Small Business Economics, 43(2), 493–509.
Teece, D. J. (1998). Capturing value from knowledge assets: The new economy, markets for know-how, and intangible assets. California Management Review, 40(3), 55–79.
Thornhill, S., & Amit, R. (2003). Learning about failure: Bankruptcy, firm age, and the resource-based view. Organization Science, 14(5), 497–509.
Ugur, M., Trushin, E., Solomon, E., & Guidi, F. (2016). R&D and productivity in OECD firms and industries: A hierarchical meta-regression analysis. Research Policy, 45(10), 2069–2086.
Van Praag, C. M. (2003). Business survival and success of young small business owners. Small Business Economics, 21(1), 1–17.
Wagner, S., & Cockburn, I. (2010). Patents and the survival of Internet-related IPOs. Research Policy, 39(2), 214–228.
Weiblen, T., & Chesbrough, H. W. (2015). Engaging with startups to enhance corporate innovation. California Management Review, 57(2), 66–90.
Wennberg, K., Wiklund, J., DeTienne, D. R., & Cardon, M. S. (2010). Reconceptualizing entrepreneurial exit: Divergent exit routes and their drivers. Journal of Business Venturing, 25(4), 361–375.
Wernerfelt, B. (1984). A resource‐based view of the firm. Strategic Management Journal, 5(2), 171–180.
Westhead, P., Wright, M., & Ucbasaran, D. (2001). The internationalization of new and small firms: A resource-based view. Journal of Business Venturing, 16(4), 333–358.
Yang, C., Bossink, B., & Peverelli, P. (2017). High-tech start-up firm survival originating from a combined use of internal resources. Small Business Economics, 49(4), 799–824.