Is a bit more experience bad? The role of entrepreneurial experience on investment rate
International Journal of Entrepreneurial Behavior & Research
ISSN: 1355-2554
Article publication date: 28 March 2019
Issue publication date: 19 August 2019
Abstract
Purpose
This study investigates the influence of entrepreneurial experience on small business investment. The purpose of this paper is to examine whether entrepreneurs with more prior start-up experience are better able to identify business opportunities and successfully transform these opportunities into investment projects.
Design/methodology/approach
The empirical setting in this study is Vietnam. The authors employ a panel data of small businesses (mostly households) from 2005 to 2013, and use a fixed effect method to estimate the regression coefficients. The results are also re-checked using the general method of moments and matching technique.
Findings
Empirically, it is found that entrepreneurial experience is an important determinant of investment decisions. Specifically, entrepreneurs with one start-up experience make more investments than novice entrepreneurs. However, entrepreneurs with more than one start-up experience do not make more investments than entrepreneurs with one start-up experience.
Research limitations/implications
This is country-specific research. Further study may employ data from multi-countries to re-test the validity of the hypotheses.
Originality/value
This study provides a new perspective for analysing the role of entrepreneurial experience on entrepreneurial investments. It shows that prior start-up experience may turn out to be a liability to entrepreneurs since it restricts their ability to identify new opportunities.
Keywords
Citation
Nguyen, B. (2019), "Is a bit more experience bad? The role of entrepreneurial experience on investment rate", International Journal of Entrepreneurial Behavior & Research, Vol. 25 No. 6, pp. 1166-1187. https://doi.org/10.1108/IJEBR-06-2018-0375
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited