Managing risk in the formative years: Evidence from young enterprises in Europe

Young Jun Kim, Nicholas S. Vonortas

Research output: Contribution to journalArticlepeer-review

33 Citations (Scopus)

Abstract

This paper empirically investigates aspects of risk management in young small enterprises effort to survive and grow. We use a new dataset on several thousands small businesses in their "formative age" (2-8 years old) in 10 European countries and 18 sectors. Firms across all types of sectors use internal risk mitigation strategies to manage technology risk and operational risk. Financial risk is managed by tapping formal and informal networks. Market risk appears less amenable to internal management action. Formal network participation (strategic alliances) is a strategy cutting across all kinds of risk with the exception of operational risk. Firms in knowledge-intensive sectors (high-tech manufacturing and KIBS) engage in risk management activities more extensively. Firms led by more educated entrepreneurs and/or operating in demanding volatile markets tend to network more and to use internal risk mitigation strategies more extensively.

Original languageEnglish
Pages (from-to)454-465
Number of pages12
JournalTechnovation
Volume34
Issue number8
DOIs
Publication statusPublished - 2014 Jan 1

ASJC Scopus subject areas

  • Engineering(all)
  • Management of Technology and Innovation

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