This paper focuses on whether and how a recent entrepreneurial exit relates to subsequent entrepreneurial engagement. Entrepreneurial exit can be an indicator of entrepreneurial learning and its effect on subsequent engagement can be a major source of the evolution of industries and economies. Entrepreneurial exit is defined as shutting down, discontinuing or quitting a business. The levels of engagement include none, potential, intentional, nascent, young and established entrepreneurship.

We explore whether persons that have recently experienced an exit are more likely to engage in subsequent entrepreneurial activities than those who have not recently experienced such an exit. And, we investigate the specific conditions that influence those who recently exited to engage in entrepreneurial activities.

Inspired by human capital theory, an entrepreneurial exit can be seen as an indicator of accumulated entrepreneurial human capital (for example, knowledge, skills and experience). One would expect a recent entrepreneurial exit to have a positive effect on the likelihood of engaging in entrepreneurial activities.