Learning from Others’ Failure and Successful Innovation in Entrepreneurship: Evidence from France

Abstract

People learn not only from their own success but also from others’ failure. However, we have limited understanding of whether this common knowledge also hold for entrepreneurs. To fill this gap, we analyze whether nascent entrepreneurs also learn from failure and successful innovation of other companies to create their own ventures. Using French firms data from 2010 to 2014, we find the empirical evidence of this kind of learning phenomena. Fixed effect regressions show the positive relationship between the number of entrepreneurs and the number of bankruptcy in a given region. The young and innovative enterprises also show the positive impact on the establishment of start-ups in a region.