Entrepreneurial research lack clarity on the role of past entrepreneurial activity in the job marke. Entrepreneurial experience is widely portrayed in the literature as being “too good to hire,” potentially leading to negative reemployment outcomes. However, limited attention has been given to the role of skill-based signals in shaping employer perceptions. This study distinguishes between generalist entrepreneurs—who develop broad, cross-functional skills across areas such as finance, marketing, and operations—and specialist entrepreneurs—who acquire deep expertise in specific domains during their entrepreneurial journey. It proposes that specialist entrepreneurs, by accumulating domain-specific expertise, are more likely to be perceived as capable of meeting specific job requirements within hierarchical organizations and as being less prone to turnover compared to their generalist counterparts. To examine how these differing skill structures are evaluated in traditional employment contexts, this study conducted a field experiment in the Chinese labor market, involving 1,200 applications across two occupational sectors. The results support these propositions: generalist entrepreneurs experienced a significant entrepreneurial penalty, while specialist entrepreneurs demonstrated a clear advantage compared to generalists and performed on par with the control group. This study advances the understanding of entrepreneurial penalties by uncovering skill-specific variations in employer perceptions and provides actionable insights for improving hiring practices to better recognize the distinct value of specialist entrepreneurial talent.
