DR. PAUL WESTHEAD IS WITH THE Centre for Small and Medium- sized Enterprises, Warwick Business School, University of Warwick, United Kingdom, and Professor Sue Birley is with The Management School, Imperial College of Science, Technology and Medicine, London, United Kingdom. This study explores employment change in 408 independent, owner-managed new firms in Great Britain which had received their first order between 1986 and 1990. In order to unravel the factors associated with standardised employment change in new independent firms exploratory bivariate correlation analysis was used. Eighty-eight variables were identified from the literature and they relate to the 'internal' characteristics of the principal owner-manager and the business as well as a range of variables which capture various aspects of the 'external' environment. Bivariate correlation analysis results are presented for separate sub-samples of 'manufacturing' and 'service' firms. Moreover, in order to identify the combination of factors associated with employment change in surveyed new firms the data were further subjected to multiple correlation and regression analysis.
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