Determinants of Portfolio and Serial Entrepreneurship: Theory and an Application to Vietnam

2 PM, room 3E, Department of Economics and Management

Speaker: Tran Thu Hien, Edge Hill University, UK

Abstract

This paper deals with the issue of portfolio and serial entrepreneurship in Vietnam. We present an occupational choice model for entrepreneurs, in which, based on their individual skills and on the quality of their business, entrepreneurs can keep their original business, expand it in new sectors (portfolio entrepreneur), shut it down to either start a new one (serial entrepreneur) or to enter the labor market. We test our theory using a 10-year panel dataset of more than 4000 non-state manufacturing firms from 2001 to 2010. We estimate an occupational choice model and a survival model, using different methodological treatments to correct for unobserved heterogeneity and endogeneity. We find that (i) both serial and portfolio entrepreneurs are endowed with stronger human capital than their novice counterparts; (ii) high-skilled entrepreneurs facing low business quality are more likely to become habitual ones; (iii) the current business of a serial entrepreneur is endowed with less technological resources; (iv) regarding the impact of investment capital, both serial and portfolio entrepreneurs are more likely to run smaller and less capital intensive businesses; (v) finally, both serial and portfolio entrepreneurs survive longer than their novice counterparts do. Our findings shed new light on industrial policy in transition and post-transition countries, suggesting that public financial resources should be devoted also to serial and portfolio entrepreneurs, rather than only to nascent and start-up novice ones.
Keywords: Portfolio entrepreneurship, serial entrepreneurship, occupational choice, transition countries, industrial policy.
JEL codes: F02; L26; L53.

The paper is co-authored with Emanuela Carbornara and Enrico Santarelli, University of Bologna