The Formation of Firms and the Prior Experience of New Entrepreneurs

Enrico Colombatto () and Arie Melnik

ICER Working Papers from ICER - International Centre for Economic Research

Abstract: We use a simple model to analyze the founding stage of new firms. Our goal is to characterize the directional causality between the expected rewards from entrepreneurship and the length of prior labor market experience that entrepreneurs possess. We test predictions about the timing of the formation of new firms on a sample of Italian entrepreneurs who founded new firms in the period 1992-2004. We obtain three main results. First, the timing of the foundation of new firms is determined primarily by the expectation of higher income and not so much by the perception of risk. Second, earlier experience of entrepreneurs in full time employment has a positive impact on the size of newly founded firms. Third, when we separate founders who work alone from founders who work with family partners, we find that the latter establish and control larger firms.

Pages: 23 pages
Date: 2006-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.bemservizi.unito.it/repec/icr/wp2006/ICERwp32-06.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:icr:wpicer:32-2006

Access Statistics for this paper

More papers in ICER Working Papers from ICER - International Centre for Economic Research Corso Unione Sovietica, 218bis - 10134 Torino - Italy. Contact information at EDIRC.
Bibliographic data for series maintained by Daniele Pennesi ().