The impact of firm characteristics and firm environment on survival of newly established SMEs: empirical evidence from Turkey

Purpose This study aims to examine the influence of firm-specific characteristics and regional and industry-level factors on the survival of newly established small and medium-sized enterprises (SMEs) in Turkey. It also investigates whether these effects vary according to the initial scale of the firm. Design/methodology/approach The data from over 100,000 newly established SMEs operating in Turkey between 2009 and 2020 was analyzed using the Cox regression model. Findings SMEs that are larger, more productive and export more, and that operate in less economically developed cities and more innovative industries are more likely to survive. Moreover, these effects vary according to the initial scale of firms. Research limitations/implications This study has several limitations that should be noted. First, register data improve reliability but lack information on many firm-level characteristics that may affect survival. Second, the results are based on post-2009 data and reflect economic and institutional conditions specific to that period, which may limit their applicability over time. Finally, firm exit is treated as failure, although the data do not distinguish between negative exits and positive exits such as mergers. Practical implications The results suggest that policymakers should avoid a holistic approach when formulating policies for SMEs and develop separate approaches for micro, small and medium-sized firms. They also provide insights for owners and managers to help them ensure the survival of their firms. Originality/value The findings add to the existing understanding of the factors that contribute to the survival of start-up SMEs, particularly by examining the impact of factors such as the level of innovation and economic development of the environment in which the firm operates, which have been relatively little studied in the literature. More importantly, the results of the study underscore the importance of recognizing SMEs as a non-homogeneous group in research and policy formation.