Are all the potential entrepreneurs so good?

Abstract

While the vast economic literature on entry has been recently accompanied by a growing literature on the post-entry performance of newborn firms, still few studies propose a connection between the two phenomena. Exploiting the opportunity of using data concerning potential entrepreneurs, this study attempts to relate ex-ante economic, individual and environmental features to both the decision to start a new firm and - in the case of actual foundation - to the post-entry performance exhibited by the newborn firm. Empirical results based on 365 Italian potential founders show that entrepreneurial projects based on a rich information set, a first-best choice and on self commitment are more likely to develop into actual startups and better post-entry performances.