Failing firms and successful entrepreneurs: serial entrepreneurship as a temporal portfolio
AbstractEntrepreneurial performance is almost always confounded with firm performance. In this paper we argue for an instrumental view of the firm by formally showing that entrepreneurs can amplify their expected success rates by designing their careers as temporal portfolios that exploit contagion processes embedded in serial entrepreneurship. The advantages to holding concurrent portfolios that exploit heterogeneity are well known. The same advantages may be achieved in the serial context through contagion. Our model exploits an observation due to William Feller on the near equivalence of the two, statistically speaking. It also leads to empirically plausible implications about the size distribution of firms in the economy and illustrates the relevance of considering firms and entrepreneurs as distinct loci of analysis. Copyright Springer Science+Business Media, LLC. 2013
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Bibliographic InfoArticle provided by Springer in its journal Small Business Economics.
Volume (Year): 40 (2013)
Issue (Month): 2 (February)
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Web page: http://www.springerlink.com/link.asp?id=100338
Serial entrepreneurship; Firm performance; Industrial organization; Population ecology; Labor economics; Financial economics; G11; G24; J24; L25; L26;
Find related papers by JEL classification:
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
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