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This paper studies entrepreneurship and firm creation through the lens of serial
entrepreneurs – entrepreneurs who establish more than one firm. Using data covering
the universe of Chinese firms, we document key facts about serial and non-serial entrepreneurs
and develop a theory rationalizing how their behavior is shaped by ability,
endowments, and capital market frictions. Serial entrepreneurs have higher average
productivity and lower return on capital than non-serial entrepreneurs. However, this
premium conceals significant heterogeneity, with a majority of serial entrepreneurs underperforming
relative to non-serial entrepreneurs. We link these differences to capital
market frictions favoring some, but not all, entrepreneurs.
