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When to Start a New Firm?: Modelling the Timing of Novice and Serial Entrepreneurs

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  • Gries, Thomas
  • Naude, Wim

Abstract

The success of new start-up firms often depends on timing. It is valuable for the potential entrepreneur to wait for the right moment before starting a new firm. In this paper we provide a theoretical model to determine the optimal time for starting a new firm. We integrate insights from the real option theory with the theory on entrepreneurial market entry. An important and novel feature of our model is that it allows the start-up timing decisions of novice and serial entrepreneurs to be distinguished.

Suggested Citation

  • Gries, Thomas & Naude, Wim, 2009. "When to Start a New Firm?: Modelling the Timing of Novice and Serial Entrepreneurs," WIDER Working Paper Series 039, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:rp2009-39
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    File URL: http://www.wider.unu.edu/sites/default/files/RP2009-39.pdf
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    Keywords

    entrepreneurship; serial entrepreneurship; start-ups; real options; stochastic optimal control;

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