Serial entrepreneurs and exploration behavior: the impact of novelty creation and IPO success

Abstract

Serial entrepreneurs are presumably influenced by prior venture experience, which helps improve their performance in subsequent venture. However, the impact of prior venture experience on serial entrepreneurs’ behavior in subsequent venture is relatively groundless. Therefore, we explore how prior experience influences serial entrepreneurs’ behavior in subsequent venture, especially exploration behavior. We find that the greater the novelty creation in prior venture, the more the local search in subsequent venture. However, owing to IPO success, serial entrepreneurs may do fewer local search in subsequent venture, and the effect of prior venture’s novelty creation on exploration behavior decreases. Using data on entrepreneurs and ventures around the world as well as patent data, we find support for our theories. The results have meaningful implications for the study on serial entrepreneurship and a broader impact on the study on organizational learning.