What Happens to Nascent Entrepreneurs? an Econometric Analysis of the Psed

Posted: 4 Nov 2009

See all articles by Simon C. Parker

Simon C. Parker

University of Western Ontario; Durham University - Department of Economics and Finance; IZA Institute of Labor Economics

Date Written: 2005

Abstract

Policy-makers, lenders, and business startup support agencies all have a vested interest in the outcomes of nascent entrepreneurs (NEs).Three outcomes of NEs in one to two years time are predicted: if they will still be NEs, if they will be starting a new venture, or if they will have given up. The data for this study are drawn from interviews of NEs as conducted by the Panel Study of Entrepreneurial Dynamics (PSED) in 1998-99.After the initial interview, subjects were re-interviewed at 12-month intervals.Using a multinomial logit framework, the NE outcomes are predicted to a reasonably good degree.It is also found that NEs that went on to start ventures were more likely to be in high-tech fields, to own their own homes, to receive external financing, and to have self-employed parents.NEs who took longer to launch were wealthier (more self-financed) and were more likely to be non-white and to imagine creating a solo home-based or non-high-tech firm. Finally, NEs who gave up their ventures are more likely to have attractive "outside" options in the home and in paid employment.The implications of these findings as they relate to policy-making are discussed, as are areas for future research. (AKP)

Keywords: Nascent entrepreneurs, Business conditions, Management decisions, Panel Study of Entrepreneurial Dynamics (PSED), Startups, Individual traits, Early stage financing, Minorities, Survival rates, Lending policies

Suggested Citation

Parker, Simon C., What Happens to Nascent Entrepreneurs? an Econometric Analysis of the Psed (2005). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship. Available at SSRN: https://ssrn.com/abstract=1497814

Simon C. Parker (Contact Author)

University of Western Ontario ( email )

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Durham University - Department of Economics and Finance ( email )

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IZA Institute of Labor Economics

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