Entrepreneurial Experience and Firm Exit over the Business Cycle

62 Pages Posted: 28 Aug 2018 Last revised: 4 May 2020

See all articles by Erin McGuire

Erin McGuire

Scheller College of Business, Georgia Institute of Technology

Date Written: May 1, 2020

Abstract

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

McGuire, Erin, Entrepreneurial Experience and Firm Exit over the Business Cycle (May 1, 2020). Available at SSRN: https://ssrn.com/abstract=3233800 or http://dx.doi.org/10.2139/ssrn.3233800

Erin McGuire (Contact Author)

Scheller College of Business, Georgia Institute of Technology ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

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