The Relationship Between Bankruptcy Experience And Subsequent Entrepreneurial Decision Making

The number of bankruptcy cases is rising rapidly.Since the official implementation of the Enterprise Bankruptcy Law in 2007,courts across the country have accepted more than 59,000 bankruptcy cases.Bankruptcy is the protection of entrepreneurship and an important way for entrepreneurs to break away from entrepreneurial failure.Existing research explores the impact of bankruptcy system on entrepreneurial activities from the macro level,and believes that a friendly bankruptcy system is conducive to entrepreneurs to start a new business,but ignores the impact of the heterogeneity of bankruptcy events experienced by entrepreneurs on their subsequent entrepreneurial decisions.Accordingly,this study explores the influence of the two types of bankruptcy events on the three important decisions of entrepreneurs’ subsequent entrepreneurship.Specifically,this paper studies and examines the effects of bankruptcy type and bankruptcy duration on the subsequent entrepreneurial entry decision,subsequent entrepreneurial speed and re-entrepreneurship team size.This paper matches the data in the "People’s Court News" and "Tian Yan Cha" databases from 2010 to 2020,uses the logit model and the general linear regression model to test the theoretical hypothesis,and uses the relogit model,robust regression and other methods to analyze the research results for robustness check.This paper finds that:(1)Compared with entrepreneurs who experienced "bankruptcy abolition",entrepreneurs who experienced "bankruptcy property distribution" are more likely to start a new business;Entrepreneurs who have "completed the distribution of bankruptcy property" are faster to start businesses again;(3)Compared with entrepreneurs who have experienced "bankruptcy abolition",entrepreneurs who have experienced "completed distribution of bankruptcy property" have smaller teams to start businesses later.Counter-intuitively,this paper finds that:(4)entrepreneurs who have experienced bankruptcy with a longer duration are more likely to start a new business than entrepreneurs who have experienced bankruptcy;(5)entrepreneurs who have experienced bankruptcy are more likely to Entrepreneurs who have been around longer are more likely to start businesses again.Finally,the data results of this study show that there is no significant difference in the team size of entrepreneurs who have experienced bankruptcy for a longer time than entrepreneurs who have experienced bankruptcy for a short time.This article adds awareness to the core question "What influence does bankruptcy experience have on entrepreneurs’ subsequent entrepreneurial decisions?" First,this paper explains the relationship between bankruptcy experience and entrepreneurial decision-making at the micro level.Existing studies have focused on the impact of the macro bankruptcy system on entrepreneurial decision-making,ignoring the effect of the differences in bankruptcy events experienced by entrepreneurs on their subsequent entrepreneurial decision-making.Based on the perspective of failure recovery,this paper provides a new explanation for the relationship between the two.Second,most of the existing studies only focus on whether entrepreneurs start businesses again after failure,but pay little attention to the types of subsequent entrepreneurial decisions.On the basis of exploring whether to start a new business again,this paper classifies the subsequent entrepreneurial decision-making,further explores the speed of the subsequent entrepreneurial venture and the size of the re-entrepreneurship team,and supplements the research in the field of subsequent entrepreneurial decision-making.The research conclusions have important implications for entrepreneurs to rationally make entrepreneurial decisions after bankruptcy,and for policy makers to create a good bankruptcy business environment.