Out of sight but not out of mind: Why failure to account for left truncation biases research on failure rates

Yang, Tiantian; Aldrich, Howard E.

doi:10.1016/j.jbusvent.2012.01.001

Cited by 112 publications

(87 citation statements)

References 59 publications

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“…Consequently, we see that the timing of these goal statements is critical because ‘the formation of the goal is a key moment within the entrepreneurial journey and that the timing of this moment within the process matters’ (McMullen and Dimov, , p. 1503). Hence, as with Kim et al () and Yang and Aldrich (), we see that the achievement of milestones such as early‐stage profitability and first sales are landmark steps for the founder in reaching venture viability.…”

Section: Introductionsupporting

confidence: 79%

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In Pursuit of Time: Business Plan Sequencing, Duration and Intraentrainment Effects on New Venture Viability

Hopp

Greene

2017

J Management Studies

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In this study, we examine three under‐explored dimensions of the temporal relationship between formal written business plans and the achievement of new venture viability. First, we theorize and investigate the effects of plan sequencing; arguing that a business plan written early on in new venture development increases the prospects of venture viability. Second, we examine plan duration effects, and argue that there is a curvilinear relationship between spending time on a plan and achieving venture viability. Finally, we investigate plan intraentrainment effects (synchronization with other gestation activities). We theorize that if plans are synchronized with other gestation activities, venture viability is more likely. Using longitudinal data and controlling for truncation and endogeneity issues, we find that it is beneficial to plan early but that this is contingent on how long a founder spent on a plan and whether or not a plan is intraentrained with other gestation activities.

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Section: Introductionsupporting

confidence: 79%

“…Yang and Aldrich () identify that left and right censoring biases are temporal issues that have to be controlled for in using PSED II data. Left censoring occurs when an event (e.g., new venture viability) has occurred before study enrolment.…”

Section: Methodsmentioning

confidence: 99%

In Pursuit of Time: Business Plan Sequencing, Duration and Intraentrainment Effects on New Venture Viability

Hopp

Greene

2017

J Management Studies

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“…This makes our sample more similar to other work on new ventures that has a disproportionate coverage of larger new ventures (Yang and Aldrich 2012). The significance of this is that, only by year 10, would the median surviving firm from this dataset have had sales sufficient for them to be included in official data.…”

Section: Summary Statisticsmentioning

confidence: 87%

Predicting new venture survival and growth: Does the fog lift?

et al. 2016

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This paper investigates whether new venture performance becomes easier to predict as the venture ages: does the fog lift? To address this question we primarily draw upon a theoretical framework, initially formulated in a managerial context by Levinthal (Adm Sci Q 36(3):397-420, 1991) that sees new venture sales as a random walk but survival being determined by the stock of available resources (proxied by size). We derive theoretical predictions that are tested with a 10-year cohort of 6579 UK new ventures in the UK. We observe that our ability to predict firm growth deteriorates in the years after entry-in terms of the selection environment, the 'fog' seems to thicken. However, our survival predictions improve with time-implying that the 'fog' does lift.

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“…The existence of a firm is registered on the database through its entry in one of two (or both) major UK business directories, The Yellow Pages or Thomson Local. Because of this method of data capture, the point at which the firm's existence is captured is closer to its actual inception than in the official VAT data and the problem of so-called 'left truncation' (Yang and Aldrich, 2012) is reduced. For this reason, in 2010 TBM had 2.6m firms registered on it compared to the UK government's VAT dataset which had approximately 1.5m.…”

Section: Datamentioning

confidence: 99%