Factors Affecting Survival of New Firms in the Financial Crisis: the Role of the Local Milieu

Abstract

This paper investigates how the long-lasting financial crisis is affecting the survival of nascent firms. The target of this research is a sample of 64 firms that benefit from the interaction with a high-technology innovation cluster located in Barcelona (Spain). A logistic regression analysis is conducted to predict survival using a wide set of variables as predictors. The born-global and high productivity ICT firms show the best prediction of success. Financial leverage has played also a critical role in the evolution of businesses whereas milieu effects have been insufficient to overcome the difficulties of financial crisis.