ABSTRACT
New firm formation has a positive effect on regional economies, where it involves the creation of employment and enhances innovation rates (Delmar and Davidsson, 2000). This implication has resulted in a host of studies which link economic growth and new firm formation (Acs and Armington, 2003; Garofoli, 1994; Ahn, 2001). In these studies, new firms are typically considered as one group. However, they come about in many different ways and consequently, their attributes differ (Parhankangas and Arenius, 2003). An experienced businessman may set up his own consultancy firm at the end of his career, a group of graduates may commercialize an idea picked up at university, or a multinational may try to enter a new market. Each new firm has a unique gestation history, which leads to specific attributes and in turn, affects its impact on the economy. To understand truly regional economic growth, it may be useful to distinguish between firms and try to determine which are most likely to have a considerable impact on the economy.
