Multiple Effects of Business Plans on New Ventures
38 Pages Posted: 5 Mar 2009
Date Written: March 5, 2009
We investigate the multiple effects of writing a business plan prior to start-up on new venture performance. We argue that the impact of business plans depends on the purpose for and circumstances in which they are being used. We offer an empirical methodology which can account for these multiple effects while disentangling real impact effects from selection effects. We apply this to English data where we find that business plans promote employment growth. This is found to be due to the impact of the plan and not selection effects.
Keywords: New Ventures, Business Plans, Switching Regression Modelling
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