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Exploring the impact of different types of prior entrepreneurial experience on employer firm performance

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  • Burke, Andrew
  • Millán, José María
  • Román, Concepción
  • van Stel, André

Abstract

We investigate the impact of prior entrepreneurial experience on current performance of firms with employees (employer firms). We distinguish between external entrepreneurial experience obtained outside of the current firm and internal entrepreneurial experience obtained within the boundaries of the employer firm currently run. Regarding the latter we focus on a special type of prior internal experience, i.e. as an own-account worker before scaling up to employer firm. Theoretically, both types of prior entrepreneurial experience are associated with different processes of learning-by-doing. Empirically, we find that both external entrepreneurial experience and internal experience as an own-account worker enhance employer firm performance. Our results therefore imply that, for individuals without any prior entrepreneurial experience wishing to start a new firm, a lean start-up strategy (as an own-account worker) is to be preferred over a more resourceful strategy hiring employees from the start.

Suggested Citation

  • Burke, Andrew & Millán, José María & Román, Concepción & van Stel, André, 2018. "Exploring the impact of different types of prior entrepreneurial experience on employer firm performance," Journal of Business Research, Elsevier, vol. 90(C), pages 107-122.
    • Handle: RePEc:eee:jbrese:v:90:y:2018:i:c:p:107-122
    DOI: 10.1016/j.jbusres.2018.05.004
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    Keywords

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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