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The Value of Human and Social Capital Investments for the Business Performance of Startups

Author

Listed:
  • Niels Bosma
  • Mirjam van Praag
  • Roy Thurik
  • Gerrit de Wit

Abstract

We investigate the manifold posed question: "To what extent does investment in human and social capital, besides the effect of 'talent', enhance entrepreneurial performance?" We distinguish between three different performance measures: survival, profits, and generated employment. On the basis of the empirical analysis of a rich Dutch longitudinal data set of firm founders, we conclude that specific investments indeed affect the three performance measures substantially and significantly. Specific attention is paid to the unobserved talent bias. Moreover, the effect of the emergence of so called "knowledge industries" is explored.

Suggested Citation

  • Niels Bosma & Mirjam van Praag & Roy Thurik & Gerrit de Wit, 2004. "The Value of Human and Social Capital Investments for the Business Performance of Startups," Small Business Economics, Springer, vol. 23(3), pages 227-236, October.
    • Handle: RePEc:kap:sbusec:v:23:y:2004:i:3:p:227-236
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    References listed on IDEAS

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    1. van Gelderen, Marco & Frese, Michael & Thurik, Roy, 2000. "Strategies, Uncertainty and Performance of Small Business Startups," Small Business Economics, Springer, vol. 15(3), pages 165-181.
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    More about this item

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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