Once Bitten, Twice Shy? The Performance of Entrepreneurial Restarts


Metzger, Georg


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URL: http://ub-madoc.bib.uni-mannheim.de/1466
URN: urn:nbn:de:bsz:180-madoc-14669
Document Type: Working paper
Year of publication: 2006
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: G33 M13 J23 ,
Subject headings (SWD): Unternehmensgründung , Insolvenz , Neugründung
Keywords (English): Business Failure , Firm Growth , Entrepreneurial experience
Abstract: The aim of this paper is to analyze the effect of entrepreneurial experience on firm growth. According to the human capital theory, individuals who have higher ‘human capital’ are more successful than others. Entrepreneurial experience is a kind of human capital and, therefore, should affect firm performance positively. In reality, however, not all types of experience indicate enhanced knowledge alone. Bad experience, here the experience of failure, might equally be a signal for entrepreneurial weakness and, thus, an argument for exercising restraint in possible further business ventures. The ambiguous effects of this failure experience on firm success necessitate an in-depth analysis of the issue. Therefore, this paper contains an empirical comparison of firms involving experienced entrepreneurs and novice firms. The analysis shows that entrepreneurial experience affects firm growth positively. Accounting for failure experience separately reveals a negative effect. Interpreting this finding in combination with other control measures indicates that failed entrepreneurs indeed behave more cautiously regarding firm growth.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Metzger, Georg (2006) Once Bitten, Twice Shy? The Performance of Entrepreneurial Restarts. Open Access [Working paper]
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