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Do Entrepreneurs Matter?

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  • Becker, Sascha O.

    ()
    (University of Warwick)

  • Hvide, Hans K.

    ()
    (University of Bergen)

Abstract

In the large literature on firm performance, economists have given little attention to entrepreneurs. We use deaths of more than 500 entrepreneurs as a source of exogenous variation, and ask whether this variation can explain shifts in firm performance. Using longitudinal data, we find large and sustained effects of entrepreneurs at all levels of the performance distribution. Entrepreneurs strongly affect firm growth patterns of both very young firms and for firms that have begun to mature. We do not find significant differences between small and larger firms, family and non-family firms, nor between firms located in urban and rural areas, but we do find stronger effects for founders with high human capital. Overall, the results suggest that an often overlooked factor – individual entrepreneurs – plays a large role in affecting firm performance.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7146.

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Length: 45 pages
Date of creation: Jan 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7146

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Keywords: entrepreneurship; firm performance; human capital;

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References

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Knowing the Who: Identifying the effect of entrepreneurs on firms
    by berodsat in NEP-HIS blog on 2013-03-27 13:36:39
  2. The incentives for entrepreneurs
    by Johan Fourie in Johan Fourie's Blog on 2013-03-28 05:13:36
  3. Knowing the Who: Identifying the effect of entrepreneurs on firms
    by berodsat in NEP-HIS blog on 2013-03-27 13:36:39
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Cited by:
  1. Henrekson, Magnus & Sanandaji, Tino, 2013. "Small Business Activity Does not Measure Entrepreneurship," Working Paper Series 959, Research Institute of Industrial Economics, revised 26 Jan 2014.

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