Understanding the Dynamics of Nascent Entrepreneurship

This paper analyses the factors impacting the process of creating a new business. Using the dataset from the Second Panel Study of Entrepreneurial Dynamics (PSED II), an in-depth analysis of the gestation process of a new business is made according to the level of human capital of the nascent entrepreneurs and their assistances. It examines whether the level of human capital of nascent entrepreneurs and their assistances influence the rate at which nascent entrepreneurs engage in their entrepreneurial activities, their tendency to concentrate activities in a short period of time, and the overall timing of the start-up activities. The results suggests strong evidence that a higher level of human capital of nascent entrepreneurs leads to a higher rate of start-up activities, the start-up activities are spread out over more time, and the start-up activities are concentrated later rather than earlier over the gestation process. Moreover, the data provides strong evidence that assistances lead also to higher rates of organizing activities, lower concentration of organizing activities, and a later timing of the average activities.