The Productivity Advantage of Serial Entrepreneurs

Using panel data from Denmark from 2001 to 2013, the authors find that serial entrepreneurs — those who open more than one business — have higher sales and greater productivity than do novice entrepreneurs — those who open only one business. Specifically, serial entrepreneurs’ firms have 98% higher sales than the novices’ firms, and serial entrepreneurs utilize more initial capital and labor, and thus are 49% more productive. Further, certain subsets of serial entrepreneurs perform especially well; those who hold a portfolio of overlapping firms or who open as limited liability corporations are top performers. The authors’ findings suggest that 41% of LLC entrepreneurs are serial entrepreneurs, thus deepening the need to understand these types of entrepreneurs. Finally, female entrepreneurs are shown to realize sizable gains from serial entrepreneurship: The firms of both female and male serial entrepreneurs are twice as large as the firms of novice entrepreneurs of their respective gender.