Designing service quality to survive: Empirical evidence from Chinese new ventures

The sizeable literature on service success suggests that service quality is a major success factor in that it drives customer retention and market share; the service provider's ability to capitalize on scale economies is also an antecedent of success. This literature, however, generally studies established firms and does not consider the special challenges faced by new service startups. In addition, the potentially complex interactions between service quality dimensions and scalability have not been studied. This study proposes a model of survival of new service ventures based on the dimensions of service quality and examines the contingency role of scalability, develops research hypotheses, and empirically tests them using a sample of 479 new service ventures in China. The study provides a rich theoretical understanding of the antecedents to new service venture survival and insight to new service managers who can better allocate their scarce resources to build quality and scalability effectively.