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Business Experience and Start-up Size: Buying More Lottery Tickets Next Time Around?

  • Alex Coad

    (SPRU, University of Sussex)

  • Julian Frankish

    (Barclay’s Bank, UK)

  • Paul Nightingale

    (SPRU, University of Sussex)

  • Richard G. Roberts

    (Barclay’s Bank, UK)

  • David J. Storey

    (University of Sussex)

This paper explores the determinants of start-up size by focusing on a cohort of 6,247 businesses that started trading in 2004, using a unique dataset on customer records at Barclays Bank. Quantile regressions show that prior business experience is significantly related with start-up size, as are a number of other variables such as age, education and bank account activity. Quantile treatment effects (QTE) estimates show similar results, with the effect of business experience on (log) start-up size being roughly constant across the quantiles. Prior personal business experience leads to an increase in expected start-up size of about 50 %. Instrumental variable QTE estimates are even higher, although there are concerns about the validity of the instrument. Copyright Springer Science+Business Media New York 2014

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Paper provided by SPRU - Science and Technology Policy Research, University of Sussex in its series SPRU Working Paper Series with number 203.

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Length: 26 pages
Date of creation: 10 Dec 2012
Date of revision:
Handle: RePEc:sru:ssewps:203
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