Do human and social capital investments influence survival? A study of female immigrant entrepreneurship in Germany

The objective of this study is to examine to what extent investments in human and social capital enhance the survival performance of immigrant and native female entrepreneurs in Germany. The empirical analysis is based on unique data derived from the Chamber of Industrial and Commercial Matters in Munich, Germany. The data set consists of 110,250 companies that were either founded or liquidated in Upper Bavaria during the period 1997-2004. We develop a Gompertz-Makeham hazard model to predict the survival changes of those enterprises. Our main findings confirm the negative influence of either aforementioned type of capital on the hazard rate. Most notably, the inverted U-shape relation is not only evident between success and human capital endowment, but between social capital and survival duration as well. The latter result is unique in its nature, and has not been detected for the area of immigrant entrepreneurship in general.