Founding Conditions and the Survival of New Firms

Paul A. Geroski, José Mata*, Pedro Portugal

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review


We analyze the effects of founding conditions on the survival of new firms. Based on arguments from several theoretical perspectives, namely economics, organizational ecology, and the resource‐based view of the firm, we develop hypotheses that relate the survival of firms to the conditions confronted by firms at each moment and to those prevailing at the time of founding. We develop an empirical model that allows the effects of founding conditions to be transitory and estimate how long such effects last. The results of estimating such a model indicate that founding effects are important determinants of exit rates. Moreover, in most cases, their effect on survival seems to persist with little attenuation for several years following the founding of the firm. Overall, our findings suggest that there is no absolute superiority of any of the aforementioned theoretical perspectives over the others, and there are important elements in all of them to explain the survival of firms.
Original languageEnglish
JournalStrategic Management Journal
Issue number5
Pages (from-to)510-529
Number of pages20
Publication statusPublished - May 2010
Externally publishedYes


  • Survival
  • New firms
  • Founding conditions
  • Entrepreneurship

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