Owner-Managed UK Corporate Start-Ups: An Exploratory Study of Financing and Failure

Entrepreneurship Research Journal 6(4), pp 345-367, 2016

Posted: 14 Jul 2015 Last revised: 21 Dec 2017

See all articles by Michael J. Peel

Michael J. Peel

Cardiff University - Cardiff Business School

Date Written: July 14, 2015

Abstract

After highlighting the importance of small companies to the UK economy, new archival evidence is provided from an exploratory study which investigates the financing and failure of 21,147 UK single owner-managed (OM) corporate start-ups. Relative to comparable US survey evidence, UK OM corporate start-ups rely very heavily on debt financing from inception, with minimal equity being injected by owners and with retained earnings making only a modest contribution to initial financing. Financial gearing is found to be an important determinant of failure after controlling for company-specific and owner characteristics.

Interestingly, the results indicate that foreign-owned company start-ups are less failure prone. Based on the empirical findings of the study and that of extant research, a number of suggested avenues for future research are discussed.

Keywords: corporate start-ups, owner-managed, financing, technical and legal failure, financial gearing

JEL Classification: G21, G33, M21

Suggested Citation

Peel, Michael J., Owner-Managed UK Corporate Start-Ups: An Exploratory Study of Financing and Failure (July 14, 2015). Entrepreneurship Research Journal 6(4), pp 345-367, 2016, Available at SSRN: https://ssrn.com/abstract=2630486

Michael J. Peel (Contact Author)

Cardiff University - Cardiff Business School ( email )

Cardiff
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
341
PlumX Metrics