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Serial entrepreneurship, learning by doing and self-selection

  • Vera Rocha


    (Universidade do Porto, cef.up and CIPES)

  • Anabela Carneiro


    (Universidade do Porto and cef.up)

  • Celeste Amorim Varum


    (Universidade de Aveiro, DEGEI and GOVCOPP)

It remains a question whether serial entrepreneurs typically perform better than their novice counterparts owing to learning by doing e¤ects or mostly because they are a selected sample of higher-than-average ability entrepreneurs. This paper tries to unravel these two effects by exploring a novel empirical strategy based on continuous time duration models with selection. We use a large longitudinal matched employer-employee dataset that allows us to track almost 220,000 individuals who have left their first entrepreneurial experience. Over 35,000 serial entrepreneurs are identified and followed in their second business, in order to evaluate how entrepreneurial experience acquired in the previous business improves persistence by reducing their exit rates. Our results show that serial entrepreneurs are not a random selection of ex-business-owners. The positive association found between prior experience and serial entrepreneurs' survival is mainly due to selection on ability, rather than the result of learning by doing.

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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series CEF.UP Working Papers with number 1312.

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Length: 29 pages
Date of creation: Jul 2013
Date of revision:
Handle: RePEc:por:cetedp:1312
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