What makes some people habitual entrepreneurs? Decomposing habitual entrepreneurship in the light of Lazear’s theory

Abstract

Purpose In spite of the recognised significance of habitual entrepreneurship, enough is not known about the drivers that lead individuals to become habitual entrepreneurs. Drawing from Lazear’s theory of entrepreneurship, this paper addresses the specifics of habitual entrepreneurs in terms of different human capital-related factors, including breadth and diversity of experience and education. This paper aims to elucidate what makes some people habitual entrepreneurs. Design/methodology/approach In this empirical study on a broad data set (1,538 surveys), the authors juxtapose habitual entrepreneurs with ex-entrepreneurs who decided to give up and chose a salary job after running their first and only firm. The authors formulate four hypotheses that are tested by using a logit regression to model the probability of being a habitual entrepreneur vs giving up entrepreneurship and choosing a salary job. Findings The probability of being a habitual entrepreneur increases with the diversity of both managerial and professional experience, as well as with the breadth of education. In addition, entrepreneurial self-efficacy supports setting up more than one firm. Practical implications The findings actualise knowledge of whether habitual entrepreneurs are unique concerning their pools of human capital. They broaden the knowledge of the backgrounds of the decision to start up a business again. Originality/value This paper contributes to the current entrepreneurship discussion by offering an enhanced understanding of habitual entrepreneurship. The phenomenon of repeatedly engaging in entrepreneurship is a promising source of knowledge that enables us to better understand entrepreneurship. In addition, the authors verify and extend Lazear’s theory to a new group of entrepreneurs.