There is considerable consensus in the literature that entrepreneurs are prone to unrealistic optimism. Our new field evidence from a sample of four-month-old start-ups echoes this finding: as many as 87% of new entrepreneurs expect to survive at least three years in business, whereas the actual...

While the negative qualitative relation between the cost of debt capital and firm age is rather well established in the financial economics literature, there are few, if any, quantitative estimates available of the magnitude of the age effect. This study analyses this effect by utilizing a large...

Using patterns of disagreement between credit rating agencies, Donald P. Morgan (American Economic Review, 2002, Vol. 92, No. 4, pp. 874-888) shows that financial institutions are more opaque than other types of firms. In this paper we employ this novel measure to study the determinants of...

The paper summarizes the findings obtained during the first year of the Venture Fun project, carried out in an EU Network of Excellence PRIME and funded from the Sixth Framework Programme. The paper defines the central concepts of the project, identifies questions for further elaboration and...

This report is a descriptive account of the major features of the Venture Capital (VC) Industry in Finland. It has been prepared as a background report for a project entitled Venture Fun, carried out in an EU Network of Excellence PRIME and funded from the Sixth Framework Programme. The report...

The amendment to the German Trade and Crafts Code in 2004 offers a natural experiment to asses the causal effects of this reform on the probabilities of being self-employed and transition into and out of self-employment, using cross-sections (2002-2006) of German microcensus data. This study...

Start-ups mostly have only limited internal financing. Post-entry performance should thus strongly depend on the availability of new external capital. In this study we analyze the impact of financial constraints on the performance of Swiss start-ups. Since we use cohort data, we have for some...

The aim of this study is to shed light on the factors which determine the post-entry performance of new firms. It is often argued that new firms are the driving force of structural changes and sometimes they are even characterized as an engine of economic growth. Nevertheless, the empirical...

This paper investigates the impact of new firms' quality on the magnitude of their employment effects. Our results clearly show that the quality of start-ups, measured by their affiliation with sectors and innovative industries, strongly influences the direct and the overall employment...

This paper reviews the current state of knowledge about the effect of new business formation on regional development. After a brief sketch of the origins of research on this issue, the main results of different lines of inquiry are discussed. Main issues are the development of start-up cohorts,...