Serial entrepreneurship, learning by doing and self-selection

Abstract

It remains a question whether serial entrepreneurs typically perform better than their novice counterparts owing to learning by doing e¤ects or mostly because they are a selected sample of higher-than-average ability entrepreneurs. This paper tries to unravel these two e¤ects 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 track almost 220,000 individuals who have left their …rst entrepreneurial experience. Over 35,000 serial entrepreneurs are identi…ed and followed in their second business, in order to evaluate how entrepreneurial experience acquired in the previous business improves persistence by reducing their exit rates. Our results show that serial entrepreneurs are not a random selection of ex-business-owners. The positive association found between prior experience and serial entrepreneurs'survival is mainly due to selection on ability, rather than the result of learning by doing.

The impact of habitual entrepreneurial experience on new firm closure outcomes

“…This theorizing and our subsequent results, therefore, build on and extend the evidence from a growing number of studies which suggest that habitual experience can lead to costly errors. For example, Parker (2013) finds that habitual entrepreneurship provides only temporary performance effects, whilst other studies, like ours, find that there are few benefits from habitual experience (Frankish et al 2013;Rocha et al 2015). Such evidence is valuable because, by pointing to the ''darker'' side of habitual experience, it helps to correct the prevailing bias towards the assets rather than the liabilities of entrepreneurial experience.…”

“…Since we are unable to sample habituals that decided not to return to entrepreneurship, we may be under-estimating the likely experiential learning benefits of prior experience amongst those habitual founders that elect not to re-enter. Rocha et al (2015), however, do control for selection bias in their Portuguese study and show that habitual experience in itself provides few performance benefits. Further, because our findings relate to habituals as a group, this does not preclude that individual habituals may learn from their experiences and successfully apply these experience in their new firm.…”

Análisis semiparametrico de los factores asociados a la sostenibilidad de los emprendimientos

“…También la deuda hipotecaria disminuye la sostenibilidad y la probabilidad de que los individuos creen una empresa, y esta es aún menor cuando el emprendimiento se presenta en sectores con mayor riesgo, como lo platean Bracke, Hilber & Silva (2015) -Experiencia. Este factor es considerado por diversos autores como una de las variables que aporta positivamente a la sostenibilidad de los emprendimientos (Rocha, Carneiro & Amorim 2015;Jung & Peña 2004), sustentando que la inexperiencia de los emprendedores es una de las causas que puede llevarlos al fracaso aún en condiciones de mercado favorables, ya que puede conducirlos a tomar decisiones equivocadas en cuanto a los niveles de endeudamiento, crecimiento y recuperación de la inversión, En este mismo sentido, Ronstadt (1984), propone que la experiencia contempla diferentes categorías: i) experiencia educativa, se refiere al proceso formativo del emprendedor y puede incidir positiva o negativamente en la sostenibilidad de la empresa, dependiendo del modelo educativo en el que fue formada la persona, ii) experiencia técnica, iii) experiencia sectorial, iv) experiencia de gestión y, v) experiencia emprendedora, estas cuatro categorías inciden positivamente en la sostenibilidad de las empresas. Así mismo, algunos autores como Bird (1989) plantean que la experiencia de gestión es una de las principales causas de fracaso de las nuevas empresas.…”

If You Don't Succeed, Should You Try Again? The Role of Entrepreneurial Experience in Venture Survival

“…over-optimism) (Hayward et al, 2006), because it is difficult to apply prior experience to novel entrepreneurial situations (Frankish et al, 2012) or because they attribute failure to external situational factors rather than underlying issues in terms of effort or ability (Diwas et al, 2013). A more pessimistic view of experience, however, is that what actually matters more than experience is the underlying entrepreneurial talent of the entrepreneur to venture outcomes (Rocha et al, 2013;Chen, 2013).…”

“…Entrepreneurs are also prone to over-optimism (De Meza, 2002;Fraser and Greene, 2006) and often attribute failure to others rather than themselves (Diwas, Staats, and Gino, 2013). Parker (2006) shows further entrepreneurs typically make few adjustments to their behaviour in the face of prior evidence whilst Eesley and Roberts (2012) Chen (2013), Rocha, Carneiro and Varum (2013) all argue that entrepreneurial talent rather than entrepreneurial experience is more likely to determine venture outcomes. Overall, there is a need for research to explore if, indeed, prior entrepreneurial experience is efficacious, particularly to support the formation of guidance to entrepreneurs.…”