The impact of habitual entrepreneurial experience on new firm closure outcomes

Sandra Gottschalk, Francis J. Greene, Bettina Müller

Research output: Contribution to journalArticlepeer-review

12 Citations (Scopus)
212 Downloads (Pure)

Abstract

In this paper, we argue that it is difficult for habitual entrepreneurs to use their experiential knowledge to develop a more viable new firm than novice entrepreneurs. Hindered by the difficulty of disentangling how actions lead to outcomes in low predictive environments such as new firm settings; hampered by the novelty and uncertainty of new firm closure; and misguided by subjective beliefs about their ability, we contend that habitual entrepreneurs close their new firm just as quickly as novice entrepreneurs and are just as likely to go bankrupt. Using large-scale panel data that track new firm closure amongst 7400 new German firms, we find that the new firms run by habitual entrepreneurs close just as quickly as those run by novice entrepreneurs. We also find that habituals are just as likely as novices to see their new business go bankrupt.
Original languageEnglish
Pages (from-to)303–321
Number of pages19
JournalSmall Business Economics
Volume48
Issue number2
Early online date17 Aug 2016
DOIs
Publication statusPublished - Feb 2017

Keywords

  • Habitual entrepreneurs
  • Novice entrepreneurs
  • Firm closure
  • Panel data

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