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Illegal Entrepreneurship Experience

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Author Info

  • Ruta Aidis

    ()
    (University College London)

  • Mirjam van Praag

    ()
    (Faculty of Economics, Universiteit van Amsterdam)

Abstract

Existing studies show a positive relationship between entrepreneurs' business performance and their conventional human capital as measured by previous business experience and formal education. In this paper, we explore whether illegal entrepreneurship experience (IEE), an unconventional form of human capital, is related to the performance and motivation of entrepreneurs operating legal businesses in a transition context. Using regression techniques on a sample of 399 private business owners in Lithuania, we find that, in general, IEE is significantly and positively associated with subjective measures of business motivation. Moreover, younger entrepreneurs benefit from their IEE in terms of business performance, indicating that they have been more successful than older entrepreneurs in transferring their IEE to a market oriented setting. In addition, IEE and business performance are positively related for entrepreneurs who started completely new legal businesses. Thus, our research partially supports the notion that prior experience in the black or gray market may signal and provide valuable human capital for legal enterprising. This discussion paper has resulted in a publication in the Journal of Business Venturing , 2007, 22(2), 283-310.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 04-105/3.

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Date of creation: 23 Sep 2004
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Handle: RePEc:dgr:uvatin:20040105

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Web page: http://www.tinbergen.nl

Related research

Keywords: entrepreneurship; human capital; illegal entrepreneurship; transition economy;

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References

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  1. De Meza, D. & Southey, C., 1995. "The Borrower's Curse: Optimism, Finance and Enterpreneurship," Discussion Papers 9502, Exeter University, Department of Economics.
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Cited by:
  1. Prof. Walter Ruda & Prof. Thomas A. Martin & Benjamin Danko & Dr. Agnieszka Kurczewska, 2012. "Existenzgründungsintentionen von Studierenden – Ein Entrepreneurship-Vergleich von Polen und Deutschland," Proceedings- 10th International Conference on Mangement, Enterprise and Benchmarking (MEB 2012), Óbuda University, Keleti Faculty of Business and Management.
  2. Desai, Sameeksha, 2009. "Measuring Entrepreneurship in Developing Countries," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. André van Stel & Mirjam van Praag & José Maria Millán & Emilio Congregado & Concepcion Roman, 2013. "The value of an educated population for an individual's entrepreneurship success," Scales Research Reports H201103, EIM Business and Policy Research.

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