David J. Storey

Cross-national Comparisons of the Variation in New Firm Formation Rates

REYNOLDS P. D., STOREY D. J. and WESTHEAD P. (1994) Cross-national comparisons of the variation in new firm formation rates, Reg. Studies 28, 443–456. Births of new firms have been seen to be a major source of new employment creation in developed countries. In the European Community (EC), government policy for much of the 1980s focused upon encouraging the startup of new enterprises. This research examines birth rates of new firms by region in France, Germany (West), Italy, Ireland and the United Kingdom. Comparison is also made with similar studies which have been conducted in parallel for Sweden and the United States. The key findings of the study are twofold. First, the average new firm birth rates are roughly similar across countries and there are similar regional variations within all countries; the most fertile regions have annual new firm birth rates that are two to four times higher than the least fertile regions. Second, the underlying processes affecting new firm births at the regional level app...

The birth of new firms Does unemployment matter? A review of the evidence

The purpose of this paper is to review the most significant recent literature identifying the determinants of new-firm births and the role that unemployment plays. In doing so, the paper draws upon two distinct strands in the economics literature. The first strand of literature is from the field of industrial organization, where the role of entry has been examined within the structure-conduct-performance paradigm. The second strand comes from the literature on entreprepreneurship. Whereas the first approach tends to focus on the industry as the unit of analysis and is concerned primarily with inter-industry comparisons, the second strand of literature is more oriented towards the firm as a unit of analysis and the impact exerted by the macro-economic environment. It is concluded that the most important development for future research is at the interface of these two approaches.

Management Training and Small Firm Performance: Why is the Link So Weak?:

PROFESSOR DAVID STOREY AND DR. Paul Westhead are with the Small and Medium Enterprise Centre at Warwick University, England. To improve the internal efficiency and business performance of small and medium-sized enterprises, a number of training initiatives have been introduced in the United Kingdom over the last decade. This has been based on the provision that training can be a powerful agent of change, facilitating and enabling a company to grow, expand and develop its capabilities and so enhance profitability. This paper seeks to review research which has examined the relationship between small firm performance profits, growth or survival and participation in management training. Although the prime focus of the current paper is upon the United Kingdom context, an earlier paper examined research literature from elsewhere in Europe, Canada, the United States, and Australia. Its conclusion was that the relationship between participation in management training and small business performance is currently not well established. The current paper briefly reviews these issues but is primarily concerned to establish reasons for the weak relationship between management training and small business performance in well-conducted research.

Introduction: Entrepreneurship and Economic Development

ZOLTAN J. ACS*† and DAVID J. STOREY‡§ *Merrick School of Business, University of Baltimore, 1420 North Charles Street, BC 491, Baltimore, MD 21201, USA. Email: zacs@ubalt.edu †Max Planck Institute for Research into Economic Systems, Jena D-07745, Germany ‡Centre for Small and Medium Sized Enterprises, University of Warwick, Coventry CV4 7AL, UK. Email: smeds@wbs.warwick.ac.uk §EIM Business and Policy Research, PO Box 7001, NL-2701 AA Zoetermeer, the Netherlands

Exploring the link, among small firms, between management training and firm performance: a comparison between the UK and other OECD countries

Small firms are much less likely than large firms to provide their employees and their managers with formal training. Storey and Westhead offer two explanations of this, which they refer to as the ‘ignorance’ explanation and the ‘market’ explanation. This paper reviews recent research findings that increasingly point towards support for the ‘market’ over the ‘ignorance’ explanation. While it has a policy interest in the UK, the paper draws comparisons with five other OECD countries: Canada, Finland, Germany, Japan and the USA. The paper shows that there is ambiguity in the evidence relating management training to small firm performance. When the views of trainees are sought, public programmes appear to be well received. However, econometric methods linking training participation to small firm performance produce weak findings. This suggests that the relatively low take up of formal management training is an informed decision on the part of the small firm owner/manager. It implies that seeking to increase formal small firm training activity by raising the awareness of owners/managers to the benefits of training is misguided.

Financial constraints on the growth of high technology small firms in the United Kingdom

Irrespective of the chosen measure of technological sophistication for a sample of independent high technology firms, the most technologically sophisticated appeared much more likely to report that a continual financial constraint had impeded firm growth, compared with the less technologically sophisticated.

The role of legal status in influencing bank financing and new firm growth

This paper examines the characteristics of new firm founders who use loans and overdrafts from the clearing banks to finance initially their business. Bank lending to new firms appears unrelated to the personal characteristics of founders, but related to whether individuals provide personal savings and the legal status of the business. This contrasts with the factors which influence the growth of new firms. Here, the founders age, employment status and birthplace are associated with larger firms. The only variable which appears to influence consistently both bank lending and the employment growth in firms is whether or not the business is a limited company.

Optimism and chance: The elephants in the entrepreneurship room

This article argues that existing theories of new and small firms fail to capture the temporal diversity of such enterprises. Most are ‘one-way bets’ because they provide an explanation only for growing firms. To address this, this article combines the role of chance with the optimism of the business owner into optimism and chance (OC) theory. This provides an insight into why, for example, very few new or small firms grow continuously and why, when compared to Europe, individuals in the USA who initially failed in business, ultimately became successful.

The survival and non survival of micro firms in the UK

This paper examines a combination of firm characteristics, characteristics of the owner and finance/strategy variables to explain the survival/non-survival of micro enterprises in the UK between 1985 and 1994. The theoretical underpinning of the paper derives from Frank who articulates the notion of entrepreneurial talent. The measures of ‘talent’ used in the paper do not adequately explain survival/non-survival.

Small business policy in the United Kingdom: the inheritance of the Small Business Service and implications for its future effectiveness

The launch of the Small Business Service in the United Kingdom stimulated a review of small business policy and support in the United Kingdom. The Service inherited a substantial number of policies and initiatives which have been criticised for their poorly stated aims and overall lack of coherence. The authors examine justifications for small business policy in Britain and the role of research in small business policymaking. They suggest that research has had relatively little impact, and some reasons why this has been the case. They also suggest ways of setting a small business research agenda—raising standards and ensuring the independence of research. Attention is given to the evaluation of small business policy and initiatives. It is argued that currently this is not sufficiently independent or rigorous, and the authors suggest remedies. Both quantitative and qualitative evaluation approaches are examined in order to redefine good practice. The overall aim is to suggest how the Small Business Service can be better supported by research and evaluation, enabling it to function more successfully than its predecessors.