Title: Type of ownership and the creation of new enterprises in Navarre, Spain: differences in financial survival

Authors: Zuray Melgarejo, Francisco J. Arcelus, Katrin Simon

Addresses: Departamento de Gestion de Empresas, Universidad Publica de Navarra, Campus de Arrosadia, 31006 Pamplona, Navarra, Spain. ' University of New Brunswick, Faculty of Business Administration, P.O. Box 4400, Fredericton, N.B. E3B 5A3, Canada; Departamento de Gestion de Empresas, Universidad Publica de Navarra, Campus de Arrosadia, 31006 Pamplona, Navarra, Spain. ' Departamento de Gestion de Empresas, Universidad Publica de Navarra, Campus de Arrosadia, 31006 Pamplona, Navarra, Spain

Abstract: The purpose of this paper is to study whether there are differences in the financial survival, as measured by the degree of solvency and profitability, of very small firms, classified by type of ownership, whether Participatory Capitalist Firms (PCFs) or employee/Labour-Owned Firms (LOFs). The indexes measuring these two factors include return on assets, return of income, earnings before taxes, dividends and interest for profitability; the liquidity ratio for short-term solvency; and total solvency and an index of perceived risk for the static and dynamic aspects, respectively, of long-term solvency. The evidence suggests that LOFs tend to perform better in the short term, but fall behind in the long term.

Keywords: entrepreneurship; financial survival; enterprise creation; financial solvency; risk; profitability; ownership types; Spain; small firms.

DOI: 10.1504/IJTPM.2007.015108

International Journal of Technology, Policy and Management, 2007 Vol.7 No.3, pp.225 - 244

Published online: 14 Sep 2007 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article