1 Starting anew: Entrepreneurial intentions and realizations subsequent to business closure

Abstract

Starting anew: Entrepreneurial intentions and realizations subsequent to business closure That most businesses fail is a well-known fact. But it is unknown whether ex-entrepreneurs still prefer to start a business again. The objective of this article is to explore potential and realized serial entrepreneurship. Based on three disciplines – psychology, labour economics, and sociology of careers – we have formulated propositions to explain (potential) serial entrepreneurship. These propositions are tested empirically with a longitudinal database of 79 businesses that closed within 5 years after start-up. A large majority of the ex-entrepreneurs maintain entrepreneurial intentions subsequent to business closure, while almost one in four business closures are followed by a new business (serial entrepreneurship). Our results show that the determinants of restart intention (potential serial entrepreneurship) and actual restart realization (realized serial entrepreneurship) are different. Young age of ex-entrepreneurs, a full-time prior business, and positively perceived business management experience positively affect restart intentions. Only ‘being located in an urban region ’ revealed to have a significant effect on the start of a new business. Although entrepreneurial intentions are a necessary condition for the start of a new business, this study shows that the explanation of entrepreneurial intentions is distinct from the explanation of new business formation after business closure.

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