Personal characteristics, resources, and environment as predictors of business survival

Although new venture success is frequently investigated in entrepreneurship, economics, and psychology, the studies published to date vary widely in their theoretical basis, study design, and research methodology. Based on organizational life‐cycle theory and interactional personality theory, this longitudinal study analyses predictors of venture survival. Of 354 small business owners observed over 8 years, 283 (79.9%) still had active businesses at the end of the observation period. A survey instrument was developed to measure the relevant characteristics of the entrepreneurs, their resources, and the environment. Logistic regression models predicting medium‐ and long‐term business survival included these characteristics and the interactions between them entered stepwise as blocks. Startup decisions (line of business, type, and size of planned business) were used as control variables. Much of the variance is explained by our research model (Nagelkerkes R2=.36 for survival at 4 years, and .33 for survival at 8 years). Although long‐term business survival is predicted by the individual variables of startup size and social capital (networks), a larger part of the variance is explained by environment/resource interactions.