Factors Influencing the continuation of start-up companies

Abstract

This study investigates the factors that influence the discontinuation of Japanese business start-ups using the resource-based view (RBV) framework. By conducting an empirical study using the binary logit model, this study reveals the factors that caused start-ups that began in 2006 to suspend operations by 2010. According to the results of the analysis, the better the company was prepared for potential threats before it opened, the higher the probability that the business would remain in operation. Moreover, it was found that business continuity is higher when the manager has business experience related to the current business. In terms of model fit, it was found that start-up preparation is more important to continuity than manager attributes.

Keywords:

• start-up
• RBV
• continuation
• preparation
• manager’s attributes

PUBLIC INTEREST STATEMENT

This study investigated the pre-establishment status of Japanese start-up entrepreneurship and the attributes of managers, and clarified whether or not they affect the discontinuity of entrepreneurship after the establishment. According to the analysis results, the more the company was well prepared before the opening of business, the higher the probability that the business will continue. Moreover, it was found that business continuity is higher when the manager has business experience related to the current business. Moreover, the results show that start-up preparation is more important to continuity than manager attributes.

Additional information

Funding

The author received no direct funding for this research.

Notes on contributors

Yukiko Konno

Yukiko Konno is an associate professor at the Faculty of Economics, Kokugakuin University. Her research interests include management, financial management and quantitative analysis of company activities.