The effect of experience and innovativeness of entrepreneurial opportunities on the new venture emergence in China

Abstract

PurposeThe purpose of this paper is to identify the model that explains the new venture emergence in China by examining the effects of experience and innovativeness of entrepreneurial opportunities on the new venture emergence, as well as the moderating effect of munificence.Design/methodology/approachBased on the dynamic data from the Chinese Panel Study of Entrepreneurial Dynamics (CPSED) where nascent entrepreneurs were randomly sampled and were followed for three years, this paper uses the COX proportional hazard model to answer the research questions.FindingsThose who have successful entrepreneurial experience are able to more rapidly create new ventures, whereas the relevant industry experience and innovativeness of entrepreneurial opportunities have a negative effect on the new venture emergence. Moreover, munificence negatively moderates the effects of entrepreneurial experience and innovativeness of entrepreneurial opportunities on the new venture emergence.Research limitations/implicationsThis paper only measures whether entrepreneurs have relevant industry experience, and does not reflect on the different degrees of it. In addition, small time interval of dynamic follow-up survey may bias the results.Practical implicationsThis paper revealed that not all kinds of experience promote the venture emergence, and a more innovative entrepreneurial opportunity is not always better. Entrepreneurs should accumulate experience and evaluate innovativeness of entrepreneurial opportunities rationally.Originality/valueNew venture emergence relies on the mutual influence of entrepreneurs, entrepreneurial opportunities and entrepreneurial environment. However, most studies explored the new venture emergence from a single perspective which led to a plethora of conflicting conclusions. This paper attempts to examine the effects of experience and innovativeness of entrepreneurial opportunities on the venture emergence, as well as the moderate effect of munificence.