Titel: “Serial Entrepreneurship in China”
This paper studies entrepreneurship and the creation of new firms through the lens of serial entrepreneurs, i.e., entrepreneurs who establish more than one firm. Drawing on data on the universe of all firms in China, we document key facts about serial entrepreneurs and how they differ from non-serial entrepreneurs. We develop a theoretical framework rationalizing how their behavior is shaped by endowments, ability, and capital market frictions. We also examine the key determinants of the sectoral choice for serial entrepreneurs’ second firms. We find that (1) persistent ability is a major driver of serial entrepreneurship; (2) financial frictions influence decisions to run firms concurrently versus sequentially; and (3) sector choice is influenced by risk diversification, input-output linkages, and learning.
Coauthors: Loren Brandt, Ruochen Dai, Kjetil Storesletten, Xiaobo Zhang