Title: Enduring effects or business as usual? Entrepreneurship after bankruptcy

Authors: Ingrid Wakkee; Christine Moser

Addresses: Faculty Business and Economics, Carem, Wibautstraat 3b, 1091 GH Amsterdam, The Netherlands ' Department of Organization Sciences, Faculty of Social Sciences, Vrije Universiteit Amsterdam, De Boelelaan 1081, 1081 HV Amsterdam, The Netherlands

Abstract: Previous bankruptcy is often seen as sign of poor entrepreneurial skills but few have examined whether renascent entrepreneurs actually perform worse or better upon reentering and how performance differences might be explained. Using a sample of 1,745 Dutch SMEs firms of which 67 were managed by renascent entrepreneurs this study examines potential differences in performance between renascent and other firms and explores to what extent this can be attributed to effects of the bankruptcy involvement on embeddedness, innovativeness, ambition and financial discipline. Non-parametric and multiple mediation analyses were conducted to test a set of hypotheses. Renascent entrepreneurs were found to show better sales level and were more innovative but also indicate more negative growth rates. Further, they show less financial discipline, but do not differ in their overall embeddedness and ambition levels. These mixed findings suggest that previous bankruptcy involvement is not necessarily a clear admission of failure.

Keywords: entrepreneurship; business failure; business recovery; owner-managers; SME performance; innovativeness; embeddedness; ambition; financial discipline; bankruptcy; SMEs; small and medium-sized enterprises; entrepreneurial skills; The Netherlands; renascent entrepreneurs.

DOI: 10.1504/IJBE.2016.079690

International Journal of Business Environment, 2016 Vol.8 No.3, pp.217 - 241

Received: 19 Mar 2016
Accepted: 04 Apr 2016

Published online: 09 Oct 2016 *

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