Impacts of entrepreneurial experience on firm performance in IPO firms

Abstract

This study examines the relationship between an entrepreneur's experience and firm performance and the changes in this relationship following an initial public offering (IPO). The analysis uses unique panel data (2000–2017) of all newly listed 251 high‐tech small‐ and medium‐sized Korean firms to find an inverse U‐shaped relationship between the entrepreneur's age at the time of establishment, as a proxy of experience, and entrepreneurial performance. The results suggest that accumulated experience plays an important role in entrepreneurial performance, and current policies for young entrepreneurs need to be redesigned.