New Firm Formation and Business Development : a study of new independent firms in Wales
Very little is known about the small firms sector and the new firm formation process in the Welsh economy. This study attempts to bridge this gap in Knowledge and adds to the growing body of information on new firm formation and development in the U.K. and its regions. The approach adopts a largely microeconomic perspective within a business policy strategy. Data is obtained from interviews with the founders of some 61 new independent firms in South Wales. Further information is derived from interviews with representatives of the major banks and support agencies in the Principality. The study, therefore, provides data which allows a comprehensive comparison with studies of other areas and an assessment of the new firm formation process in Wales. Information is provided on both the initial start-up and the development of new and independent firms. This study also makes a contribution to knowledge in several other areas:- 1. It outlines a method to estimate the importance of new firms in employment generation in Wales. This method could usefully be extended to other regions and indeed to the U.K. as a whole. 2. It provides statistics on the size distribution of firms in the private manufacturing sector of Industrial South Wales which can also be classified according to ownership status. A potentially important factor in the new firm formation process. 3. It shows that existing theories of price determination are largely inadequate at describing methods of new firm pricing. Data are presented on the pricing practices of firms when they first enter a market and a representative model of pricing methods in new firms is suggested. 4. It attempts to relate various microeconomic concepts to the very specialised situation found in new firms,both at the time of start-up and during the infant stage of business development. Barriers to entry, scale and location decisions and limits to firm growth are considered in this context.
Business enterprises, Wales, Economic conditions
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