Pre Entry Motives into Entrepreneurship and Post Entry Entrepreneurial Orientation
AbstractThis paper examines empirically the link between the post-entry strategies of new entrepreneurs and the duration of the firm. We use a sample of French entrepreneurs that have set up or taken over a firm during the first six months of 1994. For firms that are still alive at least four years later we have information both on the individual pre-entry motives of the entrepreneurs and on the post entry Entrepreneurial Orientation. We also know if the firm is still running or closed down two years after having implemented the post entry strategies, i.e. during 1998-1999. Using a Cox model (proportional hazard model), we show that "push" entrepreneurs (unemployed more than one year) who adopt an entrepreneurial behaviour are globally more likely to survive. A possible explanation of this result would be that in this category of constrained entrepreneurs, the minimum efficient scale (MES) is not reached. The Entrepreneurial Orientation is then a way to outreach the MES and consequently product market strategies to capture customers are efficient. "Pull" entrepreneurs (salaried who have acquired an experience in the same branch of activity) have more information a priori about the desired product and its characteristics, the tastes of customers, the rules of the competition on the product market. For them the Entrepreneurial Orientation does not constitute an efficient strategy in order to reduce information asymmetries between clients and product or service supplied.
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Bibliographic InfoPaper provided by TEPP Working Papers in its series Papers with number 2010-12.
Date of creation: 12 Dec 2010
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- Jean Bonnet & Nicolas Le Pape, 2010. "Pre Entry Motives into Entrepreneurship and Post Entry Entrepreneurial Orientation," Working Papers halshs-00809763, HAL.
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
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