The survival and growth of new establishments in Sweden, 1987-1995

The aim of the study is to examine the survival of new establishments and to identify factors affecting their survival probability and their employment growth. This study uses a unique data set on all new establishments that were created in Sweden 1987 and 1988, with the exception of the construction industry. The results show among others that: (i) new establishments face a high risk of closing down, (ii) the probability of establishment survival increases with the age and size of the establishment, (iii) variables that are assumed to measure access to resources (being a part of a multi-unit firm, and being new due to merger or dispersal) have a positive effect on survival, (iv) the number of employees at the start-up year has a negative effect on the employment growth, and (v) demographic and educational factors are important in explaining survival and growth.