Starting anew: Entrepreneurial intentions and realizations subsequent to business closure
AbstractWe know that most businesses fail. But what is not known is to what extent failed ex-entrepreneurs set up in business again. The objective of this article is to explore potential and realized serial entrepreneurship. Based on three disciplines - psychology, labour economics, and the sociology of careers - we formulated propositions to explain (potential) serial entrepreneurship. We tested these propositions empirically with a longitudinal database of 79 businesses that had closed within 5 years after start-up. A large majority of the ex-entrepreneurs maintained entrepreneurial intentions subsequent to business closure, while almost one in four business closures were followed by a new business (serial entrepreneurship). Our results show that the determinants of restart intention (potential serial entrepreneurship) and actual restart realization (realized serial entrepreneurship) are different. Ex-entrepreneurs who are young, who worked full-time in their prior business, and who recall their business management experience positively are likely to harbour restart intentions. Only 'being located in an urban region' transpired to have a significant effect on the start of a new business. Although entrepreneurial intentions are a necessary condition for the start of a new business, this study shows that the explanation of entrepreneurial intentions is distinct from the explanation of new business formation subsequent to business closure.
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Bibliographic InfoPaper provided by Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group in its series Papers on Entrepreneurship, Growth and Public Policy with number 2006-10.
Length: 24 pages
Date of creation: Mar 2006
Date of revision:
Other versions of this item:
- Schutjens, V. & Stam, F.C., 2006. "Starting Anew: Entrepreneurial Intentions and Realizations Subsequent to Business Closure," Research Paper ERS-2006-015-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- Erik Stam & Veronique Schutjens, 2006. "Starting anew: Entrepreneurial intentions and realizations subsequent to business closure," Papers in Evolutionary Economic Geography (PEEG) 0605, Utrecht University, Section of Economic Geography, revised Mar 2006.
- NEP-ALL-2006-03-25 (All new papers)
- NEP-BEC-2006-03-25 (Business Economics)
- NEP-ENT-2006-03-25 (Entrepreneurship)
- NEP-TID-2006-03-25 (Technology & Industrial Dynamics)
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