Contingency factors and entrepreneurship: influence in business activity

Abstract

Purpose

The purpose of this paper is to analyse the determinants of the survival of Spanish companies.

Design/methodology/approach

Two approaches are used and they are complementary. The first approach analyses the determinants of survival probability. For this purpose, a binary choice model is built and estimated using a sample of companies from the main economic sectors taken from the SABI database. Likewise, the Blinder–Oaxaca decomposition is applied to quantify the difference between companies with employees and without employees and the proportion of this difference that owes to observed factors or unobserved factors. Finally, the second approach is a survival analysis carried out through the Cox proportional hazard model that identifies the determinants of the duration of business activity.

Findings

The results of the empirical analysis show that companies without employees present less favourable conditions for survival at all stages of their evolution than companies with employees.

Originality/value

The contribution of this study to the empirical literature consists in analysing the difference between companies with and without employees. Due to the structure of Spanish companies, this aspect and the determinants of such difference are essential for policymakers to increase the survival for companies.

Citation

Cabrer-Borrás, B., Rico Belda, P. and Botella Carrubi, D. (2019), "Contingency factors and entrepreneurship: influence in business activity", International Journal of Entrepreneurial Behavior & Research, Vol. 25 No. 8, pp. 1685-1702. https://doi.org/10.1108/IJEBR-07-2018-0477