Serial entrepreneurship, learning by doing and self-selection

• Type: Article in International Scientific Journal
• Date: 2015

Authors

Rocha, V (Author) Other; Anabela Carneiro (Author) FEP; Varum, CA (Author) Other

Journal

Title: International Journal of Industrial Organization

Vol. 40

Pages: 91-106

ISSN: 0167-7187

Publisher: Elsevier

Indexing

ISI Web of Knowledge - 30 Citations

Scopus - 33 Citations

Other information

Authenticus ID: P-00G-BAE

DOI: 10.1016/j.ijindorg.2015.04.001

Abstract (EN): It remains a question whether serial entrepreneurs typically perform better than their novice counterparts owing to learning by doing effects 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 identify about 220,000 individuals who have left their first entrepreneurial experience, out of which over 35,000 became serial entrepreneurs. We evaluate whether entrepreneurial experience acquired in the previous business improves serial entrepreneurs' survival, after taking into account self-selection issues. Our results show that serial entrepreneurs are not a random sample of ex-business owners. Robustness tests based on the estimation of the person-specific effect, using information on individuals' past histories in paid employment, confirm that serial entrepreneurs exhibit, on average, a larger person-specific effect than non-serial business owners. Moreover, ignoring serial entrepreneurs' self-selection overestimates learning by doing effects.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 16