Is a bit more experience bad? The role of entrepreneurial experience on investment rate. Issue 6 (2nd September 2019)

• Record Type: Journal Article
• Authors: Nguyen, Bach
• Is Part Of: International journal of entrepreneurial behaviour & research. Volume 25:Issue 6(2019)
• Page Start: 1166
• Page End: 1187
• Publication Date: 2019-09-02
• Subjects: Vietnam -- Opportunity recognition -- Investment -- Small businesses -- Entrepreneurial experience; Entrepreneurship -- Periodicals; Small business -- Periodicals; 338.04
• DOI: 10.1108/IJEBR-06-2018-0375
• Languages: English
• ISSNs: 1355-2554

Abstract

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.