Starting anew: Entrepreneurial intentions and realizations subsequent to business closure
We 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.
|Date of creation:||Mar 2006|
|Date of revision:||Mar 2006|
|Contact details of provider:|| Postal: Secretariaat kamer 635, P.O.Box 80.115, 3508 TC Utrecht|
Web page: http://econ.geo.uu.nl
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ronstadt, Robert, 1988. "The Corridor Principle," Journal of Business Venturing, Elsevier, vol. 3(1), pages 31-40.
- Everett, Jim & Watson, John, 1998. "Small Business Failure and External Risk Factors," Small Business Economics, Springer, vol. 11(4), pages 371-390, December.
- Carter, Nancy M. & Gartner, William B. & Shaver, Kelly G. & Gatewood, Elizabeth J., 2003. "The career reasons of nascent entrepreneurs," Journal of Business Venturing, Elsevier, vol. 18(1), pages 13-39, January.
- Garnsey, Elizabeth, 1998. "A Theory of the Early Growth of the Firm," Industrial and Corporate Change, Oxford University Press, vol. 7(3), pages 523-556, September.
- David Audretsch & Patrick Houweling & A. Thurik, 2000. "Firm Survival in the Netherlands," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 16(1), pages 1-11, February.
- Isabel Grilo & Jesus Maria Irigoyen, 2005. "Entrepreneurship in the EU: to wish and not to be," Papers on Entrepreneurship, Growth and Public Policy 2005-01, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
- Baumol, William J., 1996.
"Entrepreneurship: Productive, unproductive, and destructive,"
Journal of Business Venturing,
Elsevier, vol. 11(1), pages 3-22, January.
- Baumol, William J, 1990. "Entrepreneurship: Productive, Unproductive, and Destructive," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 893-921, October.
- Westhead, Paul & Wright, Mike, 1998. "Novice, portfolio, and serial founders: are they different?," Journal of Business Venturing, Elsevier, vol. 13(3), pages 173-204, May.
- KruegerJR, Norris F. & Reilly, Michael D. & Carsrud, Alan L., 2000. "Competing models of entrepreneurial intentions," Journal of Business Venturing, Elsevier, vol. 15(5-6), pages 411-432.
- Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
- Blanchflower, D.G. & Oswald, A., 1991. "What Makes an Entrepreneur?," Economics Series Working Papers 99125, University of Oxford, Department of Economics.
- Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
- Maria Callejon, 2004. "Introduction to "Entrepreneurship and the Demography of Firms and Industries", Special Issue," Small Business Economics, Springer, vol. 22(3_4), pages 163-164, 04.
- Marco Gelderen & Roy Thurik & Niels Bosma, 2006. "Success and Risk Factors in the Pre-Startup Phase," Small Business Economics, Springer, vol. 26(4), pages 319-335, 05.
- Marco Gelderen & Roy Thurik & Niels Bosma, 2005. "Success and Risk Factors in the Pre-Startup Phase," Small Business Economics, Springer, vol. 24(4), pages 365-380, 05.
- Marco van Gelderen & Niels Bosma & Roy Thurik, 2003. "Success and risk factors in the pre-startup phase," Scales Research Reports N200314, EIM Business and Policy Research.
- Veronique Schutjens & Erik Stam, "undated". "The Fragile Success of Team Start-ups," Papers on Entrepreneurship, Growth and Public Policy 2005-17, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
- Gatewood, Elizabeth J. & Shaver, Kelly G. & Gartner, William B., 1995. "A longitudinal study of cognitive factors influencing start-up behaviors and success at venture creation," Journal of Business Venturing, Elsevier, vol. 10(5), pages 371-391, September.
- Leo van Wissen & Jouke van Dijk, 2004. "Editorial introduction Demography of the firm and spatial dynamics," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 38(2), pages 193-197, 06.
- Veronique A.J.M. Schutjens & Egbert Wever, 2000. "Determinants of new firm success," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(2), pages 135-153.
- Paul Westhead & Deniz Ucbasaran & Mike Wright, 2003. "Differences Between Private Firms Owned by Novice, Serial and Portfolio Entrepreneurs: Implications for Policy Makers and Practitioners," Regional Studies, Taylor & Francis Journals, vol. 37(2), pages 187-200.
- Schutjens, Veronique & Stam, Erik, 2003. "The Evolution and Nature of Young Firm Networks: A Longitudinal Perspective," Small Business Economics, Springer, vol. 21(2), pages 115-134, September.
- Aad de Koning, 1999. "Business failures and entrepreneurship in international perspective," Scales Research Reports A199816, EIM Business and Policy Research.
- Paul Westhead & Deniz Ucbasaran & Mike Wright & Martin Binks, 2005. "Novice, Serial and Portfolio Entrepreneur Behaviour and Contributions," Small Business Economics, Springer, vol. 25(2), pages 109-132, 09.
- Carroll, Glenn R. & Mosakowski, Elaine M., 1987. "The Career Dynamics of Self-Employment," Institute for Research on Labor and Employment, Working Paper Series qt13p1n10b, Institute of Industrial Relations, UC Berkeley.
- van Praag, C M & Cramer, J S, 2001. "The Roots of Entrepreneurship and Labour Demand: Individual Ability and Low Risk Aversion," Economica, London School of Economics and Political Science, vol. 68(269), pages 45-62, February. Full references (including those not matched with items on IDEAS)