Once bitten, twice shy? The performance of entrepreneurial restarts
The aim of this paper is to analyze the effect of entrepreneurial experience on firm growth. According to the human capital theory, individuals who have higher ?human capital? are more successful than others. Entrepreneurial experience is a kind of human capital and, therefore, should affect firm performance positively. In reality, however, not all types of experience indicate enhanced knowledge alone. Bad experience, here the experience of failure, might equally be a signal for entrepreneurial weakness and, thus, an argument for exercising restraint in possible further business ventures. The ambiguous effects of this failure experience on firm success necessitate an in-depth analysis of the issue. Therefore, this paper contains an empirical comparison of firms involving experienced entrepreneurs and novice firms. The analysis shows that entrepreneurial experience affects firm growth positively. Accounting for failure experience separately reveals a negative effect. Interpreting this finding in combination with other control measures indicates that failed entrepreneurs indeed behave more cautiously regarding firm growth.
|Date of creation:||2006|
|Contact details of provider:|| Postal: L 7,1; D - 68161 Mannheim|
Web page: http://www.zew.de/
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.:
- Everett, Jim & Watson, John, 1998. "Small Business Failure and External Risk Factors," Small Business Economics, Springer, vol. 11(4), pages 371-390, December.
- Taylor, Mark P, 1999. "Survival of the Fittest? An Analysis of Self-Employment Duration in Britain," Economic Journal, Royal Economic Society, vol. 109(454), pages 140-155, March.
- 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.
- Erik Stam & David Audretsch & Joris Meijaard, 2008.
Journal of Evolutionary Economics,
Springer, vol. 18(3), pages 493-507, August.
- Stam, F.C. & Audretsch, D.B. & Meijaard, J., 2006. "Renascent Entrepreneurship," ERIM Report Series Research in Management ERS-2006-017-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
- Rafik Abdesselam & Jean Bonnet & Nicolas Le Pape, 2004.
"An Explanation of the Life Span of New French Firms,"
Small Business Economics,
Springer, vol. 23(3), pages 237-254, October.
- Rafik Abdesselam & Jean Bonnet & Nicolas Le Pape, 2004. "An Explanation of the Life Span of New French Firms," Post-Print hal-00149371, HAL.
- Hall, Bronwyn H, 1987.
"The Relationship between Firm Size and Firm Growth in the U.S. Manufacturing Sector,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 35(4), pages 583-606, June.
- Bronwyn H. Hall, 1986. "The Relationship Between Firm Size and Firm Growth in the U.S. Manufacturing Sector," NBER Working Papers 1965, National Bureau of Economic Research, Inc.
- Evans, David S., 1986.
"The Relationship Between Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries,"
86-33, C.V. Starr Center for Applied Economics, New York University.
- Evans, David S, 1987. "The Relationship between Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 567-581, June.
- Becker, Gary S, 1985. "Human Capital, Effort, and the Sexual Division of Labor," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 33-58, January.
- P.A. Geroski & José Mata & Pedro Portugal, 2007.
"Founding Conditions and the Survival of New Firms,"
DRUID Working Papers
07-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Bengt Holmstrom & Joan Ricart i Costa, 1986. "Managerial Incentives and Capital Management," The Quarterly Journal of Economics, Oxford University Press, vol. 101(4), pages 835-860.
- 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.
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Cabral, Luis, 1995. "Sunk Costs, Firm Size and Firm Growth," Journal of Industrial Economics, Wiley Blackwell, vol. 43(2), pages 161-172, June.
- Newey, Whitney K & Powell, James L & Walker, James R, 1990.
"Semiparametric Estimation of Selection Models: Some Empirical Results,"
American Economic Review,
American Economic Association, vol. 80(2), pages 324-328, May.
- Newey, W.K. & Powell, J.L. & Walker, J.R., 1990. "Semiparametric Estimation Of Selection Models: Some Empirical Results," Working papers 9001, Wisconsin Madison - Social Systems.
- Gerrit de Wit & Niels Bosma & Mirjam van Praag, 2000.
"Determinants of Successful Entrepreneurship,"
Scales Research Reports
H200002, EIM Business and Policy Research.
- Nerlinger, Eric A., 1996. "Firm formation in high-tech industries: empirical results for Germany," ZEW Discussion Papers 96-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic 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.
- Almus, Matthias & Engel, Dirk & Prantl, Susanne, 2000. "The Mannheim Foundation Panels of the Centre for European Economic Research (ZEW)," ZEW Dokumentationen 00-02, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Metzger, Georg, 2006. "Afterlife: Who Takes Heart for Restart?," ZEW Discussion Papers 06-38, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
When requesting a correction, please mention this item's handle: RePEc:zbw:zewdip:5476. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.