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Early Work Experience and the Transition into Entrepreneurship

Author

Listed:
  • Enrico Colombatto

    (University of Torino)

  • Arie Melnik

    (University of Haifa)

Abstract

We use a simple model to analyze the founding stage of new firms. Our goal is to characterize the directional causality between the expected rewards from entrepreneurship and the length of prior labor market experience that entrepreneurs possess. We test predictions about the timing of the formation of new firms on a sample of Italian entrepreneurs. We obtain three main results. First, the timing of the foundation of new firms is determined primarily by the expectation of higher income and not so much by the perception of risk. Second, earlier experience of entrepreneurs in full time employment has a positive impact on the size of newly founded firms. Third, founders who work with family partners establish and control larger firms.

Suggested Citation

  • Enrico Colombatto & Arie Melnik, 2007. "Early Work Experience and the Transition into Entrepreneurship," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 12(1), pages 9-26, Spring.
    • Handle: RePEc:pep:journl:v:12:y:2007:i:1:p:9-26
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    References listed on IDEAS

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    Cited by:

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    2. Swindall, Devin C. & Willis, David B. & Boys, Kathryn A. & Hughes, David W., 2011. "The Determinants of Self-Employed Income in a Regional Economy," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103957, Agricultural and Applied Economics Association.
    3. Lan, Xiujuan & Hu, Zheneng & Wen, Chuanhao, 2023. "Does the opening of high-speed rail enhance urban entrepreneurial activity? Evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 88(C).
    4. Ervin L. Black & F. Greg Burton & Peter M. Johnson, 2009. "Qualitative Factors as Determinants of Continued Success:An Examination of eBusiness Entrepreneurial Firms Using the NewVenture Template," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 13(2), pages 76-102, Fall.
    5. Coduras, Alicia & Saiz-Alvarez, José Manuel & Ruiz, Jesús, 2016. "Measuring Readiness for Entrepreneurship: An Information Tool Proposal," MPRA Paper 86603, University Library of Munich, Germany.
    6. Willis, David Brian & Hughes, David W. & Boys, Kathryn A., 2018. "An Unconditional Quantile Analysis of the Determinants of Self-Employed Income across Regional Economies: An Initial Assessment," 2018 Annual Meeting, August 5-7, Washington, D.C. 274498, Agricultural and Applied Economics Association.
    7. Willis, David B. & Boys, Kathryn A. & Hughes, David W. & Swindall, Devin C., 2012. "Evaluating the Determinants of Self-Employed Income Across Regional Economies: A Case-Study of the U.S. Southeast," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124912, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Early Work Experience; Founder; Entrepreneur; Startup;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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