Re-Entry into Entrepreneurship after Failure: Factors Influencing Serial and Second Chance Entrepreneurs

Abstract

This article investigates factors that influence the probability of re-starting after business failure, including sociodemographic and economic variables. Particularly, it examines the effect of age, educational level, the entrepreneur’s role as provider in the family, the coverage of public instruments and services for entrepreneurship and the reasons that lead the entrepreneur to close the business, on the willingness of the failed entrepreneur to start a new business. It uses a sample of 274 failed entrepreneurs from Chile, the country with the highest rate of Total early-stage Entrepreneurial Activity (TEA) in the world, according to the GEM 2019/2020 report. The results of this study indicate that the main variables have a negative influence on the probability of re-entering entrepreneurship after business failure, but only age, regional coverage of technical services for entrepreneurship, bankruptcy, preference for wage-employment and the level of regional unemployment are significant. This research contributes to broadening the empirical evidence regarding the factors that influence serial and second-chance entrepreneurs, beyond aspects related to entrepreneurial intent and elements of entrepreneurial behavior. This paper provides relevant conclusions for the design of public policies and support instruments for entrepreneurs who are willing to create a new business after business failure.