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The Quality of Entrepreneurs

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  • HansK. Hvide

Abstract

What determines the quality of entrepreneurs? The article proposes a model of the interaction between individual workers' decision to become entrepreneurs and employers' efforts to keep their best workers and ideas. The main prediction from the model is that larger firms produce entrepreneurs of higher quality than smaller firms. Using novel and unique Norwegian data, I find that previous employer size exerts a significant influence on entrepreneurial performance. For example, increasing previous employer size from the 25 percentile to the 75 percentile increases yearly profitability on assets by 6 percentage points. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.

Suggested Citation

  • HansK. Hvide, 2009. "The Quality of Entrepreneurs," Economic Journal, Royal Economic Society, vol. 119(539), pages 1010-1035, July.
  • Handle: RePEc:ecj:econjl:v:119:y:2009:i:539:p:1010-1035
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    More about this item

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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