Determinants of novice, portfolio, and serial entrepreneurship: an occupational choice approach

Abstract

In this paper we present an occupational choice model for entrepreneurs, in which, based on their individual skills and on the quality of their business, entrepreneurs can keep their original business, open a new business in the same or another sector along the current business (portfolio entrepreneur), shut it down to either start a new one (serial entrepreneur) or to turn to dependent employment. We test our theory using a 10-year panel dataset (2001 to 2010) of more than 4,000 Vietnamese manufacturing firms. We estimate an occupational choice model and a survival model and find that: (i) a greater endowment of human capital is associated with a higher likelihood to become a serial or a portfolio entrepreneur; (ii) A higher quality of the new business is associated to a higher likelihood of being habitual entrepreneurs. Particularly, high entrepreneurial skills together with a high-quality business positively influence the likelihood to be serial or portfolio; (iii) novice entrepreneurs with high entrepreneurial skill and a high-quality business are more likely to keep their business.

The Interaction of Institutional Quality and Human Capital in Shaping the Dynamics of Capital Structure

“…This valuable entrepreneurial experience is also found to exert a significantly positive effect on various measures of entrepreneurial performance in Vietnam (Santarelli and Tran 2013). However, management experience is more meaningful to wage employment opportunities (Carbonara et al 2019). As expected, we consistently find an insignificant effect of human capital variables on the informal debt ratio.…”

“…Since the financial market is underdeveloped and statecontrolled in Vietnam and non-state firms are constrained by a complex creditrationing process, accessing formal sources of loans is extremely tough for young and non-state firms. However, Vietnam is a land full of opportunity where entrepreneurs always have new opportunities to begin again after failed business attempts, with the support of their family and friends (Carbonara et al 2019). Thus, given their liability of newness and smallness, bootstrapping skills and informal sources of finance are far more essential to their financial decisions.…”

Institutional quality, conforming and evasive entrepreneurship

“…This article contributes to the growing literature on entrepreneurship in Southeast Asian emerging economies, as illustrated by Carbonara et al (2019). Like these authors, we follow an occupational choice approach to study the choice of entrepreneurial activities, underlining in our case to what extent the institutional context can lead a single firm to undertake a mix of different entrepreneurial activities.…”

“…As observed in developing countries (Naudé et al 2008), and Asia in particular (Carbonara et al 2019), Education is expected to impact entrepreneurship, although the effect is debated (Quatraro and Vivarelli 2014). We use the average district level of education of household heads (in log).…”

Networking in Weak Institutions: When Is It Good for Small Business Investment? The Case of Vietnam

“…To test the proposed hypotheses, this study employs the Small and Medium Enterprise (SME) dataset The SME survey covers information on several operational aspects of small ventures in Vietnam, including their production, sales structure, investment, and employment. In addition to formally registered enterprises, the survey also samples a substantial number of household businesses to gain a comprehensive understanding of firm dynamics in Vietnam, where the informal sector is particularly relevant (Carbonara et al, 2020). Besides venture information, household characteristics of the owner-managers and their social network information are also extensively surveyed.…”