Industrial and Corporate Level Factors on the Survival Rate of the New, Independent, and Private Korean Firms

This study investigated how industry and firm characteristics would influence the survival rate of newly created independent and private firms (NIPF) on the market. The focal two industry characteristics included the entry rate and the ratio of NIPF in industry; the focal two firm characteristics included the start-up size and added-value ratio of NIPF. We used the 2006-2011 Census on Establishment database from the Korea National Statistics Office. It was found that the most important element affecting the survival rate of NIPF was the entry rate in industry: There was a negative relationship between the firm entry rate and the firm survival rate. In addition, a firm’s start-up size was found to be positively associated with the firm survival rate. That is, the bigger a firm was, the higher its survival rate was. The findings suggest that it is essential to maintain the entry rate in industry at an appropriate level and that it is crucial to increase the initial size of a new firm. Further discussion was done for unexpected findings.