Forecasting Errors of New Venture Survival

Ari Hyytinen*, Jukka Lahtonen, Mika Pajarinen

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

19 Citations (Scopus)


This article studies entrepreneurs' forecast errors around market entry. Using data on nascent entrepreneurs in the U.S. and start-ups in Finland, we find that besides being overoptimistic on average in both countries, entrepreneurs' survival expectations can barely distinguish survival from exits. Moreover, about one fourth of the entrepreneurs do not provide an estimate for the survival of a typical venture. However, among those that do provide it, the estimates are less overoptimistic. We also compare the forecast accuracy of entrepreneurs to those of macroeconomic forecasters. Our findings provide guidance for the development of positive theories of entrepreneurial belief formation and overoptimism.

Original languageEnglish
Peer-reviewed scientific journalStrategic Entrepreneurship Journal
Issue number4
Pages (from-to)283-302
Number of pages20
Publication statusPublished - 08.12.2014
MoE publication typeA1 Journal article - refereed


  • 511 Economics
  • Entrepreneurship
  • Survival
  • Expectations
  • Overoptimism
  • Forecast error


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