The Analysis of Effects of Location Type and Firm Size on New Firms’ Survival

The aim of study is to analyze effect of internal factors(financial stability, rate of return, and technical skills) and external factors(regional factors, economic growth rate, and factors of spatial policy) on survival rate of new firms which were established between 2003 and 2007 in electronic components, computer, radio, television and communication equipment and apparatuses, employing Cox’s proportional hazard model. The levels of financial stability, rate of return, and technical skills are positively related to firm’s survival rate. Also improvement of regional factors, localization economies, urbanization economies and accessibility, and economic growth rate have positive effects on firms’ longevity. Overall planned location-firms and larger firms would be affected by only internal factors while footloose location-firms and smaller firms would be impacted by both internal and external factors. It implies that provision of industrial infrastructure and financial incentives provided by industrial complex are helpful to alleviate economic uncertainties. Also, it would be helpful to increase survival rate that improvement of accessibility by provision of transportation services, development of network for information interchange and financial support to locate in industrial complex for smaller firms and that policies to enhance financial stability for larger firms.