Determinants of Success of Subsidized Start-Ups in Germany - An Empirical Analysis
Zeitschrift für Betriebswirtschaft, Vol. 78, No. 7/8, pp. 753-777, 2008
20 Pages Posted: 16 Jul 2007 Last revised: 17 Apr 2010
A large number of new ventures in Germany are undertaken due to government aid. With the introduction of the Ich-AG or me-plc in January 2003, this share has increased strongly. Entrepreneurship research so far has said very little about the success and the determinants of success of these types of start-ups. With this study, we aim to close this gap. We analyze the success and the determinants of success of these new ventures in a large scale survey of founders that have received governmental aid for their start-up.
Our results show that the income generated by the venture is less likely to cover the costs of living in particular for elderly founders and for those founders that have experienced a long period of unemployment before they started their venture. This finding is also true for new ventures founded by women as well as for franchise start-ups. As concerns formal education, founder experience, and the fact whether the venture is founded by a team or not no significant effects exist. Industry experience, however, has a significant positive effect on the success of the new venture whereas founding and management experience have no effect.
We discuss the implications of our findings from a perspective of entrepreneurship research as well as from a perspective of governmental start-up policy.
Note: Downloadable document is in German.
Keywords: Entrepreneurship, Self-employment, Necessity entrepreneurship, Opportunity entrepreneurship, Start-up companies
JEL Classification: J23, J24, M13, C25
Suggested Citation: Suggested Citation