Entrepreneurial Experience and Firm Exit over the Business Cycle
62 Pages Posted: 28 Aug 2018 Last revised: 4 May 2020
Date Written: May 1, 2020
In this paper, I explore business cycle-related dynamics in differences in exit decisions between serial and novice entrepreneurs. Using time-series geographic variation in eco- nomic conditions, I examine how businesses founded by serial and novice entrepreneurs differentially respond to changes in average state personal income, alternative employ- ment options, and home values. Weibull survival model estimates indicate that serial entrepreneurs are more likely to endure declines in aggregate income and credit avail- ability, but are relatively more likely to go out of business as slack increases in the labor market (increases in unemployment rate). In the second part of the paper, I provide evidence that these dynamics are driven by differences in business strategies and the use of financial resources.
Keywords: Entrepreneurship, Serial Entrepreneurs, Firm Survival over the Business Cycle
JEL Classification: J24, L26
Suggested Citation: Suggested Citation