Is a Bit More Experience Bad? The Role of Entrepreneurial Experience on Investment Rate

Nguyen, Bach (2019). Is a Bit More Experience Bad? The Role of Entrepreneurial Experience on Investment Rate. International Journal of Entrepreneurial Behavior and Research, 25 (6), pp. 1166-1187.


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.

Publication DOI:
Divisions: Aston Business School > Economics, Finance & Entrepreneurship
Additional Information: © Emerald Publishing Limited 2019 Published by Emerald Publishing Limited Licensed re-use rights only
Uncontrolled Keywords: Entrepreneurial experience,Investment,Opportunity recognition,Small businesses,Vietnam,Business, Management and Accounting (miscellaneous)
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Related URLs: https://www.eme ... BR-06-2018-0375 (Publisher URL)
http://www.scop ... tnerID=8YFLogxK (Scopus URL)
Published Date: 2019-09-02
Authors: Nguyen, Bach ( 0000-0003-1527-7443)



Version: Accepted Version

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