Is work experience helpful to the success of venture creation?

Yiyuan Mai and Xuena Gu

Nankai Business Review International, 2012, vol. 3, issue 2, 187-198

Abstract: Purpose - A lot of researches suggest that work experience plays an important role in the process of venture gestation. However, previous studies cannot explain “why there is a huge difference in the entrepreneurial success rate of those persons who have work experience”. Drawing insights from the model of “job embeddedness” in human resources management research field, the purpose of this paper is to examine the impact of on‐the‐job embeddedness on the centrality of entrepreneurial activities and the duration of venture creation activities. Design/methodology/approach - Multiple regression is applied to test the hypotheses, using the dataset from the American “Panel Study of Entrepreneurial Dynamics” (PSED I). Findings - The results suggest entrepreneur's previous work experience may result in scattered venture creation activities and the duration of entrepreneurial activity extended. It means the higher degree of on‐the‐job embedded the founder has, he or she feels more compatible with current job and more comfortable in the current work environment. Practical implications - Individuals who leave current jobs and start their own business are likely to promise personal losses (e.g. giving up colleagues, interesting projects or pleasant perks). So they consistently face an inordinate amount of risk and the entrepreneurial activities and longer term of venture gestation. If individual wants to start new firms quickly and efficiently, he should not only focus on the skills needed to perform his current job, but also should train his comprehensive management skills, even entrepreneurial ability by any possible ways during the work history of being an employee. Originality/value - The paper enhances our understanding of the influence of employee's work history on the new venture creation by applying job embeddedness theory. It enlightens individuals who plan to create their own ventures to apply their on‐the‐job embeddedness to improve the success rate of entrepreneurial activities.

Keywords: Entrepreneurialism; Business formation; Experience; On‐the‐job embeddedness; Venture creation; Work experience (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eme:nbripp:v:3:y:2012:i:2:p:187-198

DOI: 10.1108/20408741211244442

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