Do Business Demographics Matter to Nascent Venture Performance? A Longitudinal Evidence from the Kauffman Firm Survey.

Augustine Yao Dzathor


Scant literature exists on impact of organizational demographics on nascent venture performance. Business demographics were looked at through the lenses of organizational traits, resource-based view and population ecology theories. The combined as well as the  individual longitudinal impact of five business demographics (nature of product, primary location of business, number of active owner-operators, business legal status and technological orientation) on nascent venture performance was examined. 754 out of the 863 businesses that survived cleaning of the first four years of the Kauffman Firm Survey (KFS) dataset were retained in the analysis sample to maintain the original sample stratification of the data set. Results of multiple regression revealed that business demographics globally had significant effect on nascent venture performance in year-2 and year-4 of first four years of existence of the cohort of businesses studied. Three of the individual business demographics indicators, namely: nature of product, business legal status and technological orientation also had significant but inconsistent effects on nascent venture performance across the four years under study. The study threw light on the longitudinal effects of business demographics on nascent venture performance and drew attention to the fact that business demographics can theoretically be envisioned through the lenses of trait theory, resource based view and population ecology theory.


Business demographics; nascent venture performance; Kauffman Firm Survey; trait theory; resource-based view

Full Text:



Barney, J. (1991). Firm resources and competitive

advantage. Journal of Management, 17: 99-120.

Beckwith, N.E. & Fitzgerald, T.J. (1981). Marketing of

services: meeting of different needs. In J.H. Donnelly &

W.R. George (Eds.). Marketing of services, American

Marketing Association Proceedings: (291-302). Chicago.

Berger, A.N. & Udell, G.F. (1995). Relationship lending and

lines of credit in small firm finance. Journal of

Business, 68 (3): 251-281.

Brentani, U. D. (1991). Success factors in developing new

business services. European Journal of Marketing, 25(2):


Brush, C.G., Edelman, L.F. & Manolova, T.S. (2008). The

effects of initial location, aspiration and resources on

likelihood of first sales in nascent firms. Journal of

Small Business Management, 46(2): 159-182.

Canina, L., Enz, C.A. & Harrison, J. S. (2005).

Agglomeration effects and strategic orientations:

evidence from the U.S. lodging industry. The Academy of

Management Journal, 48 (4): 565-581.

Casson, M. (1982). The entrepreneur: An economic theory.

Totowa, New Jersey: Barnes and Noble Books.

Chandler, G.N. & Hanks, S.H. (1994). Market

attractiveness, resource-based capabilities, venture

strategies and venture performance. Journal of Business

Venturing, 9: 331-349.

Chase, R.B. (1983). Modeling service processes. In Berry,

L. L., Shostack, G.L. & Upah G.D. (Eds.) American

Marketing Association Proceedings: (137-138). Chicago.

Chowdhury, S. (2005). Demographic diversity for building

an effective entrepreneurial team: is it important?

Journal of Business Venturing, 20: 727-746.

Cohen, J. (1968). Multiple regression as a general data

analysis system. Psychological Bulletin, 70 (6), 1.

Daft, R. (1983). Organizational theory and design. New

York, West.

Davidsson, P. (2006). Nascent entrepreneurship: empirical

studies and development. Foundations and Trends in

Entrepreneurship, 2(1): 1-76.

Delmar. F. & Shane, S. (2006). Does experience matter?

The effects of founding team Experience on the survival

and sales of newly founded ventures. Strategic

Organization, 4 (3): 215-247.

Dwyer, J.H. (1983). Statistical models for the social and

behavioral sciences. New York: Oxford University Press.

Folta, T.B., Cooper, A.C. & Baik, Y. (2006). Geographic

cluster size and firm performance. Journal of Business

Venturing, 21: 217-242.

Forsythe, S.M. & Shi, B. (2003). Consumer patronage

and risk perception in Internet shopping. Journal of

Business Research, 56 (11): 867-875.

Hadlock, P., Hecker, D. & Gannon, J. (1991). High

Technology Employment: Another View. Monthly Labor

Review 114(7): 26-30.

Hair, J. F., Black, B., Babin, B., Anderson, R.E. & Tatham,

R.L. (2010). Multivariate Data Analysis (7th Ed.).

Prentice Hall.

Hannan, M. T. & Freeman, J. (1986). Where do

organizational forms come from? SociologicalForum,

(1): 50-72.

Harper, D.A. (2008). Towards a theory of entrepreneurial

teams. Journal of Business Venturing, 23: 613-626.

Kakati, M. (2003). Success criteria in high-tech new

ventures. Technovation, 23: 447-457.

Kauermann, G., Tutz, G. & Bruderl, J. (2005). The survival

of new founded firms: a case study into varying

coefficients models. Journal of the Royal Statistical

Society, 168(1): 145-158.

Kirzner, I.M. (1979). Perception, opportunity, and profit:

Studies in the theory of entrepreneurship. Chicago:

University of Chicago Press.

Lee, C. (2003). Determinants of innovation in the

Malaysian manufacturing sector: An econometric analysis

at the firm level. Retrieved March 1, 2009 from


Lieberman, M.B. & Montgomery, D.B. (1988). First-mover

advantages. Strategic Management Journal, 9: 41-58.

Luthans, F. & Davis, T.R. (1982). An idiographic approach

to organizational behavior research: The use of single

case experimental designs and direct measures.

Academy of Management Review, 7 (3), 380-391.

Mahoney, J.T. & Pandian, J.R. (1992). The resource-based

view within the conversation of strategic management.

Strategic Management Journal, 13: 363-380.

Mendenhall, M. & Sincich, T. (2003). A Second Course in

Statistics: Regression Analysis (6th ed.), New Jersey,

Pearson Education Inc.

Murningham, J.K. & Conlon, D.E. (1991). The dynamics of

intense work groups: a study of British string quartets.

Administrative Science Quarterly, 36(2): 165-187.

Murphy, P.E. & Robinson, R.K. (1981). Concept testing. In

Donnelly, J.H. & George, W.R. (Eds.). Marketing of

services, American Marketing Association Proceedings :

( 217-220). Chicago.

Naslund, B. (1986). Financial Innovations. A Comparison

with R&D in Physical Products. Stockholm: EFI Research


Pelled, H.L., Eisenhardt, K.M. & Xin, K.R. (1999). Exploring

the black box: an analysis of work group diversity,

conflict and performance. Administrative Science

Quarterly, 44 (1):1-28.

Penrose, E.G. (1959). The theory of the growth of the firm.

New York: Wiley: 201-208

Reidenbach, E. R. & Grubbs, R.M. (1987). Developing new

banking products. Englewood Cliffs.

Scandura, T. A. & Williams, E.A. (2000). Research

methodology in management: Current practices, trends,

and implications for future research. Academy of

Management Journal, 43 (6): 1248-1264.

Schneider, B. & Bowen, D.E. (1985). New service design,

development and implementation and the employee. In

W.R. George, & C.E. Marshall, (Eds.). Developing New

Services. American Marketing Association Proceedings:

(82-101), Chicago.

Schutjens, V.A.J.M. & Wever, E. (2000). Determinants of

new firm success. Regional Science, 79: 135-159.

Sethi, R., Smith D.C. & Park, C.W. (2002). How to kill a

team’s creativity. Harvard Business Review, 80 (8):


Shane, S., Robb, A. & MPR (2007). Kauffman firm survey

/2006- Baseline/first follow-up. Study Metadata


Shostack, G.L. (1984). Design service services that

deliver. Harvard Business Review, 62: 133-139.

Storey, D.J. (1994). New firm growth and bank financing.

Small Business Economics, 6(2): 139-150.

Sundbo, J. (1997) Management of innovation in services.

The Service Industry Journal, 17 (3): 432-455

Thornhill, S. (2006). Knowledge, innovation and firm

performance in high- and low-technology regimes.

Journal of Business Venturing, 21: 687-703.

Vesper, K.H. (1990). New venture strategies. Englewood

Cliffs, N.J: Prentice Hall.

Voss, C., Johnston, R., Silvestro, R., Fitzgerald, L. &

Brignall, T. (1992). Measurement of innovation and

design performance in services. Design Management

Journal: 40-46.

Wagner, J. (1984). The post entry performance of new

small firms in German Manufacturing industries. The

Journal of Industrial Economics, 2: 141-154.

Wall Street Journal (2008). NBER Makes It Official:

Recession Started in December 2007. Real Time

Economics. Economic insight and analysis from The

Wall Street Journal.

Weinzimmer, L.G. (1997). Top management team

correlates of organizational growth in a small business

context: a comparative study. Journal of Small Business

Management, 35(3):1-9.

Wernerfelt, B. (1984). A resource-based view of the firm.

Strategic Management Journal, 5: 171-180.

Xue, M. & Harker, P.T. (2002). Customer Efficiency

Concept and Its Impact on E-Business Management.

Journal of Service Research, 4( 4): 253-267.

doi: 10.1177/1094670502004004003.



  • There are currently no refbacks.

Copyright (c)


Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.


If you find difficulties in submitting manuscript please forward your doc file to Our support team will assist you in submission process and other technical matters.

In order to get notifications on inbox please add  this domain in your email safe list.

International journal of business and social research (Print)
ISSN 2164-2540

International journal of business and social research (Online)
ISSN 2164-2559

[International Journal of Business and Social Research (IJBSR) previously published by MIR Center for Socio-Economic Research, MD, USA. From February 2018 this journal is published by the LAR Center Press, OR, USA]