LITERATURE SURVEY
2.1. FAILURE LITERATURE
2.1.1. The theoretical literature on failure
Several papers have been published in recent years on small business failure e.g. Storey, D. (1994) and Cressy, R. (1999) that have sought empirical explanations for failure, particularly at the micro-economic level. Such research has investigated the role of both human and financial capital in this process. These papers offer ‘static’ models of survival and do not explicitly address the issue of learning by the owner-manager over time. Jovanovic (1982), cited in Cressy (1999) developed a model in which this occurs. Business is ‘a learning experiment’ in which the entrepreneur learns about his/her fixed level of entrepreneurial skills over time. However, there is no possibility of learning by doing here: the ability to improve one’s skills by rectifying mistakes, finding better ways of doing things, and so on . Furthermore, the Jovanovic model assumes entrepreneurs are......
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