Illegal Entrepreneurship Experience

Arbeitspapier

Existing studies show a positive relationship between entrepreneurs' business performance and their conventional human capital as measured by previous business experience and formal education. In this paper, we explore whether illegal entrepreneurship experience (IEE), an unconventional form of human capital, is related to the performance and motivation of entrepreneurs operating legal businesses in a transition context. Using regression techniques on a sample of 399 private business owners in Lithuania, we find that, in general, IEE is significantly and positively associated with subjective measures of business motivation. Moreover, younger entrepreneurs benefit from their IEE in terms of business performance, indicating that they have been more successful than older entrepreneurs in transferring their IEE to a market oriented setting. In addition, IEE and business performance are positively related for entrepreneurs who started completely new legal businesses. Thus, our research partially supports the notion that prior experience in the black or gray market may signal and provide valuable human capital for legal enterprising.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 04-105/3

Classification and Topics

• Classification: Wirtschaft ; Labor Force and Employment, Size, and Structure ; Labor Demand ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Particular Labor Markets: Other ; Firm Performance: Size, Diversification, and Scope ; New Firms; Startups ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements ; Socialist Enterprises and Their Transitions
• Subject: entrepreneurship ; human capital ; illegal entrepreneurship ; transition economy ; Entrepreneurship-Ansatz ; Schwarzmarkt ; Schattenwirtschaft ; Humankapital ; Übergangswirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Aidis, Ruta ; van Praag, Mirjam
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/86182
• Last update: 10.03.2025, 11:42 AM CET