44 Pages Posted: 24 Dec 2010 Last revised: 4 Oct 2013
Date Written: November 1, 2012
I theoretically develop and empirically investigate the role of industry and startup experience on the forecast performance of 2,304 entrepreneurs who have started new businesses. Using the Kauffman Firm Survey I show that industry experience is associated with more accurate and less biased entrepreneur expectations. Further, the benefit of industry experience on entrepreneurial forecast performance is greater in high-technology industries. These findings are consistent with knowledge of the setting informing entrepreneurial decision making, especially in highly uncertain environments. However, in contrast to the prevailing view in the literature, I find no significant evidence that startup experience improves entrepreneurial forecast performance.
Keywords: bias, entry, entrepreneur, expectations, experience, forecasting, growth, new firms, technology
JEL Classification: D80, D83, D84, M13
Suggested Citation: Suggested Citation
Cassar, Gavin, Industry and Startup Experience on Entrepreneur Forecast Performance in New Firms (November 1, 2012). Available at SSRN: https://ssrn.com/abstract=1730318 or http://dx.doi.org/10.2139/ssrn.1730318