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Starting anew: Entrepreneurial intentions and realizations subsequent to business closure

Erik Stam and Veronique Schutjens ()

No 605, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: We know that most businesses fail. But what is not known is to what extent failed ex-entrepreneurs set up in business again. The objective of this article is to explore potential and realized serial entrepreneurship. Based on three disciplines – psychology, labour economics, and the sociology of careers – we formulated propositions to explain (potential) serial entrepreneurship. We tested these propositions empirically with a longitudinal database of 79 businesses that had closed within 5 years after start-up. A large majority of the ex- entrepreneurs maintained entrepreneurial intentions subsequent to business closure, while almost one in four business closures were followed by a new business (serial entrepreneurship). Our results show that the determinants of restart intention (potential serial entrepreneurship) and actual restart realization (realized serial entrepreneurship) are different. Ex-entrepreneurs who are young, who worked full-time in their prior business, and who recall their business management experience positively are likely to harbour restart intentions. Only ‘being located in an urban region’ transpired to have a significant effect on the start of a new business. Although entrepreneurial intentions are a necessary condition for the start of a new business, this study shows that the explanation of entrepreneurial intentions is distinct from the explanation of new business formation subsequent to business closure.

Keywords: serial entrepreneurship; business closure; entrepreneurial intentions; new business formation; The Netherlands (search for similar items in EconPapers)
Pages: 23 pages
Date: 2006-03, Revised 2006-03
New Economics Papers: this item is included in nep-bec, nep-ent, nep-hrm, nep-ino and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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http://econ.geo.uu.nl/peeg/peeg0605.pdf Version March 2006 (application/pdf)

Related works:
Working Paper: Starting Anew: Entrepreneurial Intentions and Realizations Subsequent to Business Closure (2006) Downloads
Working Paper: Starting anew: Entrepreneurial intentions and realizations subsequent to business closure (2006) Downloads
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