Past Entrepreneurial Experience Research Articles

No experience necessary: the peer effects of intended entrepreneurs

Abstract Under a randomized setting, this article finds workers with entrepreneurial ambitions—intended entrepreneurs—are (1) far more common than workers with past entrepreneurial experience and (2) increase the rate of entrepreneurship among their peers. Peer effects are persistent, stronger for tighter networks, and extend to the decision to join a startup. As intended peers explain half of the variation in entrepreneurship rates in our sample, our results demonstrate that intended entrepreneurs, even those that never personally start a firm, represent a vital component of the entrepreneurial ecosystem.

The forgetting curve in entrepreneurship: decaying learning benefits of past entrepreneurial experience

The forgetting curve in entrepreneurship: decaying learning benefits of past entrepreneurial experience

Migrant entrepreneurship support in Europe: a PRISMA systematic literature review

Background This systematic literature review (SLR) analyzes migrant entrepreneurship support in Europe through three research questions (RQs) to understand 1) migrant entrepreneur characteristics in the European context, 2) challenges encountered by migrant entrepreneurs in European host countries, and 3) policies supporting migrant entrepreneurship in Europe. This review addresses gaps in current knowledge in academia as well as issues that policymakers and practitioners face when addressing migrant entrepreneurship support. Methods This SLR employed a search protocol to retrieve published sources from 1970 to 2021, via Scopus (27 March 2022) and Web of Science (7 April 2022). Inclusion criteria targeted migrant entrepreneurship support studies while exclusion criteria eliminated domestic migration and non-European contexts. The authors worked iteratively, aligning the data with the RQs to reduce bias, and adapted Bourdieu's forms of capital to create an analytical framework for the sources included in the SLR, with a table for each RQ to synthesize relevant data for analysis. Results The review examined 91 peer-reviewed papers, with a focus on migrant entrepreneurship support in Europe, covering characteristics, challenges, and support policies. It classified migrant entrepreneur challenges and characteristics into financial, human, and social capital, as well as external factors. Common challenges include the local culture and language, network, funding, and adapting to local business practices. Migrant entrepreneurs' stability relates to time in the host country and local language proficiency and reflects past entrepreneurial experience and education. Supportive mechanisms involve local networks, financing, and mentoring. Conclusions The SLR's limitations encompass possible oversight of pertinent studies, along with potential bias in data extraction, analysis, and subjectivity due to thematic analysis. Nonetheless, the findings suggest the following research agenda for migrant entrepreneurship support: evaluating and enhancing human and social capital, sharing information, designing support programs, addressing in-group/out-group bias in support programs, and exploring bottom-up migrant entrepreneurship support approaches.

Energy poverty and entrepreneurship

We use the 2012–2018 China Family Panel Studies data to examine the relationship between household energy poverty and an individual's probability of becoming an entrepreneur. Consistent with the theory of underdog entrepreneurship that negative personal circumstances can foster self-reliance, resourcefulness and other skills and personality traits conducive to entrepreneurship, we find that spending a higher share of household income on energy consumption or being energy poor increases the probability of being an entrepreneur. The results are robust to various checks, including alternative measures of energy poverty, non-linear effects of the share of energy spending in household income, past entrepreneurial experience, alternative estimation methods and potential omitted variable bias. We also explore the channels through which energy poverty influences whether one chooses to become an entrepreneur. We find that cognitive functions, mental health and self-confidence negatively mediate, while self-belief, extroversion and openness positively mediate, the relationship between energy poverty and entrepreneurship.

Energy Poverty and Entrepreneurship

We use the 2012-2018 China Family Panel Studies data to examine the relationship between household energy poverty and an individual’s probability of becoming an entrepreneur. Consistent with the theory of underdog entrepreneurship that negative personal circumstances can foster self-reliance, resourcefulness and other skills and personality traits conducive to entrepreneurship, we find that spending a higher share of household income on energy consumption or being energy poor increases the probability of being an entrepreneur. The results are robust to various checks, including alternative measures of energy poverty, non-linear effects of the share of energy spending in household income, past entrepreneurial experience, alternative estimation methods and potential omitted variable bias. We also explore the channels through which energy poverty influences whether one chooses to become an entrepreneur. We find that cognitive functions, mental health and self-confidence negatively mediate, while self-belief, extroversion and openness positively mediate, the relationship between energy poverty and entrepreneurship.

Experience as a catalyst of export destinations: The ambidextrous connection between international experience and past entrepreneurial experience

This paper examines how different forms of accumulated exploitable knowledge—i.e., export experience with the current firm and past entrepreneurial experience—stimulate export destinations, defined as the number of foreign markets where businesses sell their products/services. The proposed hypotheses are tested on a unique sample of Costa Rican entrepreneurial businesses for 2017. Results from the sequential deductive triangulation analysis (QUAN → qual) reveal that the ambidextrous connection between export experience with the current firm and past entrepreneurial experience is an essential prerequisite for explaining export destination figures. Also, the positive effect of export experience with the current business on export destinations is more prevalent among firms created by serial entrepreneurs. These findings corroborate our argument line on the importance of generative-based learning processes. Furthermore, the results of the qualitative analysis suggest that task-specific international experience and experience gained through past business venturing are relevant micro-foundations of international business expansion in the context of the export destinations of entrepreneurial firms.

Career or Flexible Work Arrangements? Gender Differences in Self-employment in a Young Market Economy

We examined supply-side determinants of transition from the wage and salary sector to self-employment of women and men living Poland. The empirical analysis was made possible due to a unique and under explored longitudinal survey—Social Diagnosis—that contains rare indicators such as job preferences and work events. The empirical results in the 2007–2015 period indicated that women and men transitioning into self-employment were differently motivated. In terms of job attributes, women found independence at work and for those in professional occupations a job matching their competences as a desirable job attribute, while for men the lack of stress, a good salary and independence was key. The analysis of work events and its influence on self-employment weakly confirmed the glass-ceiling hypothesis. In line with other research, our analysis indicated that financial constraints strongly determined the entry into self-employment. A key human capital determinant was past entrepreneurial experience indicating a slow, cautious transition process into self-employment.

Shooting stars? Uncertainty in hiring entrepreneurs

AbstractResearch SummaryThis article advances a theory to explain why a spell of entrepreneurship affects the future wages of entrepreneurs returning to the wage sector. We propose that entrepreneurship holds a low rather than a negative information value, increasing the uncertainty around a job applicant's future productivity. Employers respond to this uncertainty by discounting the offered wage. The theory predicts that uncertainty in hiring—and thus the wage penalty—is more pronounced for entrepreneurs (a) who were in the upper tail of the wage distribution before the entrepreneurial spell, (b) who exited entrepreneurship quickly, and (c) who are hired by small employers. We test and find empirical support for these predictions using a novel dataset of matched entrepreneurs and employees from Belgium.Managerial SummaryWe investigate the effect of past entrepreneurial experience on the future wages of entrepreneurs who go back to paid employment. We propose that former entrepreneurs receive a pay cut because employers consider them as risky hires. In line with our theory, we find that former entrepreneurs are penalized the most (a) if they were highly paid employees before becoming founders, (b) if they were entrepreneurs only for a few years, (c) and if they are hired by small employers. Our findings caution star employees from experimenting with an entrepreneurial career, as failing fast is costly. Moreover, we suggest that firms value probationary contracts to lower the risk of hiring entrepreneurs while learning about their skills.

Dealing with initial success versus failure in crowdfunding market

Purpose Serial crowdfunding is becoming a common phenomenon as entrepreneurs repeatedly return to online crowdfunding to raise capital. In this study, the authors focus attention on serial crowdfunders, that is, entrepreneurs who experience launching more than one crowdfunding project. The purpose of this paper is to investigate the role of past experience on subsequent crowdfunding performance. This study also examines whether initial success vs initial failure leads serial crowdfunders to engage in more explorative behaviors (i.e. switching industry) and to take exploitative actions (i.e. adjusting campaign strategies in terms of goal setting and funding option). Design/methodology/approach Data on serial crowdfunding projects was retrieved from Indiegogo platform. The logistic regression models are estimated to assess the impact of past entrepreneurial experience on subsequent crowdfunding decisions, and to estimate the effects of the three strategies on subsequent funding performance. Findings The results show that serial creators who experienced successful initial crowdfunding are more likely to explore a new industry or product category in the crowdfunding market and to set a higher target capital for the subsequent campaign when they change a project category. Originality/value Despite the fact that there are a considerably large number of serial crowdfunders in crowdfunding market, relatively little research has been conducted to investigate the presence of learning benefits from a previous to a subsequent crowdfunding project. Two competing hypotheses, drawn from the attribution theory and hubris theory of entrepreneurship, were tested in this study to determine the impact of prior success vs failure experience on both subsequent crowdfunding decisions and funding performance.

Career or Flexible Work Arrangements? Gender Differences in Self-Employment in a Young Market Economy

We examine supply-side determinants of transition from the wage and salary sector to self-employment of women and men living Poland. The empirical analysis is made possible due to a unique and under explored longitudinal survey – Social Diagnosis – that contains rare indicators such as job preferences and work events. The empirical results in the 2007-2015 period indicate that women and men transitioning into self-employment are differently motivated. In terms of job attributes, women find independence at work and for those in professional occupations a job matching their competences as a desirable job attribute, while for men the lack of stress, a good salary and independence is key. The analysis of work events and its influence on self-employment weakly confirms the glass-ceiling hypothesis. In line with other research, our analysis indicates that financial constraints strongly determine the entry into self-employment. A key human capital determinant is past entrepreneurial experience indicating a slow, cautious transition process into self-employment.

Entrepreneurial experience and the innovativeness of serial entrepreneurs

PurposeThe purpose of this paper is to examine the effects of past entrepreneurial experience on the reported innovativeness of serial entrepreneurs’ subsequent ventures.Design/methodology/approachBuilding on insights from the generative entrepreneurial learning process and from cognition theories, the authors propose that regardless of the type of entrepreneurial experience, positive or negative, such experience enriches the cognitive schemas of serial entrepreneurs leading them to greater reported innovativeness. The proposed hypotheses are tested on a unique sample drawn from a Catalan adult population survey.FindingsResults reveal that practical experience is an essential prerequisite for entrepreneurial learning, and even negative entrepreneurial experience may induce generative entrepreneurial learning suitable for subsequent outperforming ventures for the psychologically strong who have managed to learn from their experience.Practical implicationsThe importance of this study stretches beyond a purely academic discussion and has implications for policy making within the area of business and economic development. Appropriate policy depends on the likeliness for serial entrepreneurs to improve. Thus, if serial entrepreneurs learn from their venturing experiences and/or acquire valuable knowledge from them, they may perform better, on average, in subsequent ventures. If subsequent ventures do build upon prior entrepreneurial experiences, calls for policy to encourage re-entries by entrepreneurs may be warranted, even if those entrepreneurs performed poorly in their previous ventures.Originality/valueThe authors analyze the impact of past performance of serial entrepreneurs on the reported innovativeness of their subsequence ventures. The contributions of this study stand as: the inclusion of the re-entry decision together with the innovativeness decision of entrepreneurs within the same model; separation of the positive or negative nature of serial entrepreneurs’ past experiences; focus on the entrepreneur rather than the firm as a unit of analysis; the use of a unique primary data set specifically collected for the purpose of this study about the past entrepreneurial experience of the Catalan adult population.

Bouncing Back from Failure: Entrepreneurial Resilience and the Internationalisation of Subsequent Ventures Created by Serial Entrepreneurs

This paper examines the impact over international propensity of past negative entrepreneurial experience for those who re‐enter into entrepreneurial activity; referred to as resilient serial entrepreneurs. We first hypothesise on the effects over entrepreneurial re‐entry that such negative past experience may have and highlight the link between the past entrepreneurial experience of resilient entrepreneurs and their subsequent propensity towards international markets. Building on insights from the generative experiential learning process of entrepreneurial activity and from cognition theories, we propose that resilient entrepreneurs who re‐enter business despite having faced negative entrepreneurial experiences in the past benefit from enriched cognitive schemas leading them to greater export propensity. The proposed hypotheses are tested on a unique sample drawn from a Spanish adult population survey. Results from the sequential deductive triangulation analysis reveal that practical experience is an essential prerequisite for entrepreneurial learning, and that the resilience of those with negative entrepreneurial experience induces the generative entrepreneurial learning especially suitable for subsequent internationally oriented ventures.

The increased international propensity of serial entrepreneurs demonstrating ambidextrous strategic agility

PurposeThe purpose of this paper is to analyze whether business owners that simultaneously demonstrate past entrepreneurial experience and process agility have greater export propensity levels.Design/methodology/approachThe proposed hypotheses are tested using binary choice models relating past entrepreneurial experience and reported process agility on a unique sample of 246 Catalan business owners for the year 2010.FindingsConsistent with the theoretical arguments on the relevance of generative-based cognitive agility, the results of this paper reveal that serial entrepreneurs demonstrate a greater export propensity. Additionally, the authors found that serial entrepreneurs who also demonstrate process agility show superior export propensity levels, compared to the group of business owners outside this ambidextrous group (first-time business owners without process agility).Research limitations/implicationsThe findings of this study indicate that traits characterizing international marketing agility, decisional speed and accuracy are also linked with greater export propensity levels. The added export market expansion resulting from the opportunity responsiveness of serial entrepreneurs is found to be amplified by the accuracy of internal adaptation capabilities of process agility.Practical implicationsTherefore, the promotion of ambidextrous strategic agility coming from the complementarities between the benefits of entrepreneurial experience and adaptive process abilities is essential for increasing businesses’ internationalization.Originality/valueThe paper contributes to the literature by further exploring the influence of different sources of agility on the internationalization of entrepreneurial ventures and opens a link between entrepreneurs prone toward export market expansion and international marketing agility.

SUSTAINABLE CORPORATE ENTREPRENEURSHIP INITIATIVES: A RISK AND REWARD ANALYSIS

Earlier studies recognize the importance of corporate entrepreneurship towards achieving a sustainable competitive advantage. This study proposes that the likelihood of individual participation in corporate entrepreneurship initiatives is contingent upon individual perceptions of rewards and risks. The research presents different scenarios, and tests several attributes that influence the decision to participate. Conjoint analysis utilisation simulates a real life situation where scenario analyses in varying combinations in terms of their intensity levels take place. The results indicate the most important attribute influencing the decision to participate is the probability of venture success followed closely by financial reward. As expected, job risk, pay risk and required effort are deterrents to participation; and individuals with past entrepreneurial experience are less concerned about job risk and have a higher positive perception regarding the probability of corporate venture success.

Factors affecting patentees to start‐up new venture: evidence from Greece

PurposeWhat are the conditions that influence the decision of a patentee to start a new venture? Does the possession of a patent make the individual more likely to engage in the entrepreneurial process? Does the possibility of a provisional monopoly limit the danger and the uncertainty in the decision‐making for commercial exploitation of an idea? Literature has given some light on the decision of individual patentees to establish a new venture but either these studies examine a specific group of patentees or cover national patentees’ population without distinguishing between individual and firm patentees. The purpose of this paper is to contribute to literature which aims at the detection of factors affecting the decision of individual patentees to start a new business using data from a national survey on the population of individual patentees in a less technologically developed country.Design/methodology/approachThis paper uses the responses of 434 individuals‐inventors, residents of Greece, from a broader survey conducted by the Greek Organization for Industrial Property in March 2007. Applying the collected data into a logit model, the paper addresses the questions raised in the literature about the source of knowledge, opportunities perception, and the past business experience on the decision of a patentee to start a new business venture.FindingsThe findings of the paper show that financial restraints strongly affect the decision of a patentee to start‐up a new venture. The collaboration with a higher education and research institution does not lead to an invention‐patent with technological opportunity content and this reflects the particularities of Greek academia while the opposite is the perception for the knowledge coming from market (incumbent firms). Finally, the new entrepreneur is more likely to decide to start a new venture in order to exploit commercially its patent rather than the patentee with past entrepreneurial experience. This finding contradicts the previous findings for the US and the authors believe that it may be a consequence of the Greek commercial and financial law and national culture idiosyncrasies.Originality/valueThe originality of the paper is due to the fact that for first time data from a survey of the patentees population is used. In addition, this is the first, to the authors’ knowledge, study for a less technologically advanced country. The findings of this paper have significant policy implications since it provides useful inputs for the design of the entrepreneurship policy.

Virtual World Commerce: An Exploratory Study

A virtual world is a persistent computer-based environment where many users can interact. Typically they exist as three-dimensional simulations with each user represented by an avatar (a graphical representation of the user). Many companies are anticipating that virtual worlds will be a new source of income by directly selling virtual products and services to inhabitants of the virtual world. Moreover, there is much being made of the link between product development and virtual worlds. The aim of the research is to understand the motivation of creating a business in a virtual world and the role of product development. Drawing on media richness and media features theory to position virtual worlds, this paper examines the evidence from qualitative interviews with entrepreneurs who have created new ventures in Second Life through designing and selling their own products in-world. The results demonstrate that whilst there are similarities in running businesses in a virtual world, there are also differences. Importantly the way that products are developed and marketed require different approaches. Past entrepreneurial experience was found to be useful; but this is only part of the necessary skills required.

The Role of Past Entrepreneurial Experience in the New Venture Creation Process: An Empirical Case on the Figure of a Serial Entrepreneur

In this paper we focus on the concept of serial entrepreneur - an important type of habitual entrepreneur - in order to explain the phenomenon of a new venture creation. In particular, we suppose that prior entrepreneurial experiences of an entrepreneur play a main critical role in the development of successful entrepreneurial skills useful to a new venture. Based on qualitative methodology and following a longitudinal perspective of analysis, we strive to understand how serial entrepreneurs foster (or perhaps impede) the new venture creation and development, advancing propositions regarding the importance of prior entrepreneurial experience - in terms of social networks development - for accelerating the entrepreneurial learning process useful to the launch and development of a new venture.

Start-up activities, individual characteristics, and the regional milieu: Lessons for entrepreneurship support policies from German micro data

This paper contributes to empirical research on the role of regional policy for entrepreneurship by focusing on the link between two stylized facts that emerged from a number of studies for Germany and other countries: Entry rates differ between regions, and the propensity to become an entrepreneur is influenced by socio-demographic variables and attitudes. We develop a theoretical framework to discuss this link, and we test whether for a person of a given age, degree of schooling, attitude towards risk etc. regional variables and, therefore, regional policies, do matter for the decision to start a new business ceteris paribus. Our econometric study is based on data for 10.000 persons from a recent representative survey of the population in ten German planning regions, the Regional Entrepreneurship Monitor (REM). We use a version of the probit model that takes care of the regional stratification of the data, and the results of the nonlinear models are carefully interpreted and illustrated. We find that the propensity to step into self-employment is, among others, higher for males, unemployed, people with contacts to a role model, and with past entrepreneurial experience, who live in more densely populated and faster growing regions with higher rates of new firm formation, while risk aversion and high prices of land have the opposite impact. Interestingly, it does not matter whether the region has a “left” or “right” government. However, many implications for entrepreneurship supporting policies in German regions are discussed in the final section.

Personal and Regional Determinants of Entrepreneurial Activities: Empirical Evidence from the Rem Germany

This paper contributes to empirical research in entrepreneurship by focusing on the link between two stylized facts that emerged from a number of studies for Germany and other countries: Entry rates differ between regions, and the propensity to become an entrepreneur is influenced by socio-demographic variables and attitudes. We develop a theoretical framework to discuss this link, and we test whether for a person of a given age, degree of schooling, attitude towards risk etc. regional variables do matter for the decision to start a new business ceteris paribus. Our econometric study is based on data for 10.000 persons from a recent representative survey of the population in ten German planning regions, the Regional Entrepreneurship Monitor (REM). We use a version of the probit model that takes care of the regional stratification of the data, and the results of the nonlinear models are carefully interpreted and illustrated. We find that the propensity to step into self-employment is, among others, higher for males, unemployed, people with contacts to a role model, and with past entrepreneurial experience, who live in more densely populated and faster growing regions with higher rates of new firm formation, while risk aversion and high prices of land have the opposite impact.