Survival of Spinoffs Founded as Sole Proprietorships. An Empirical Study on Italian New Ventures

Studies on spinoffs’ neglect firms founded by one individual (i.e. sole proprietorships) thus overlooking a large portion of new ventures. Other limitations are related both to the restricted time’s window of founders’ working experience normally considered and to the lack of consideration about the rank and the amount of previous working experience of the founder. Targeting these limitations, this study analyzes a sample of 3,456 Italian manufacturing sole proprietorships founded in the years 2005, 2006 and 2007 in the Veneto region. Analyses show that spinoffs have a survival advantage over other startups. Surprisingly, spinoffs from high-ranked positions have comparable hazard rates than startups while spinoffs from low-ranked positions have lower hazard rates than startups. Finally, industry-specific working experience has a positive but decreasing (U-Shape) effect on survival while general working experience does not exert any significant effect.