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The impact of human capital on the early success of necessity versus opportunity-based entrepreneurs

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  • Rui Baptista

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  • Murat Karaöz
  • Joana Mendonça

Abstract

This paper examines whether founders’ backgrounds influence new firm survival in the early years after startup, focusing, in particular, on the impact of unemployment-driven entrepreneurship. For entrepreneurs who left their previous employment to found a new firm, both general and specific human capital play a key role in enhancing early survival chances. However, various forms of human capital have little effect on early survival of unemployment-driven entrepreneurs, who rely mostly on previous entrepreneurial experience to persevere. Results suggest that pre-entry capabilities play an important role in the early success of opportunity-based entrepreneurs, but have little influence on the early success of necessity-based ones. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Rui Baptista & Murat Karaöz & Joana Mendonça, 2014. "The impact of human capital on the early success of necessity versus opportunity-based entrepreneurs," Small Business Economics, Springer, vol. 42(4), pages 831-847, April.
  • Handle: RePEc:kap:sbusec:v:42:y:2014:i:4:p:831-847
    DOI: 10.1007/s11187-013-9502-z
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. J. David Brown & John S. Earle & Mee Jung Kim & Kyung Min Lee, 2017. "High-Growth Entrepreneurship," Working Papers 17-53, Center for Economic Studies, U.S. Census Bureau.
    2. Grégoire Cauchie & Nicolas Gérard Vaillant, 2016. "New Firm Survival: Isolating the Role of Founders’ Human Capital in Accounting for Firm Longevity," Journal of Human Capital, University of Chicago Press, vol. 10(2), pages 186-211.
    3. Peter Zwan & Roy Thurik & Ingrid Verheul & Jolanda Hessels, 2016. "Factors influencing the entrepreneurial engagement of opportunity and necessity entrepreneurs," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(3), pages 273-295, December.
    4. Xi, Guoqian & Block, Jörn & Lasch, Frank & Robert, Frank & Thurik, Roy, 2017. "How Does Firm Survival Differ between Business Takeovers and New Venture Start-ups?," IZA Discussion Papers 11155, Institute for the Study of Labor (IZA).
    5. Cueto, Begona & Pruneda, Gabriel, 2015. "Job Satisfaction of Wage and Self-Employed workers. Do preferences make a difference?," MPRA Paper 65432, University Library of Munich, Germany.
    6. Fairlie, Robert W. & Fossen, Frank M., 2018. "Opportunity versus Necessity Entrepreneurship: Two Components of Business Creation," IZA Discussion Papers 11258, Institute for the Study of Labor (IZA).
    7. repec:ipg:wpaper:2014-506 is not listed on IDEAS
    8. Melodi Botha & Alex Bignotti, 0. "Exploring moderators in the relationship between cognitive adaptability and entrepreneurial intention: findings from South Africa," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-27.
    9. repec:kap:sbusec:v:49:y:2017:i:4:d:10.1007_s11187-017-9857-7 is not listed on IDEAS
    10. Arnab Bhattacharjee & Jean Bonnet & Nicolas Le Pape & Régis Renault, 2016. "Going into Business and Out of Business: The Role of Human Capital," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2016-04, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    11. repec:kap:sbusec:v:49:y:2017:i:2:d:10.1007_s11187-016-9824-8 is not listed on IDEAS
    12. repec:bla:stratm:v:38:y:2017:i:7:p:1373-1390 is not listed on IDEAS
    13. repec:spr:intemj:v:13:y:2017:i:4:d:10.1007_s11365-017-0437-8 is not listed on IDEAS
    14. Juan A. Sanchis Llopis & José María Millán & Rui Baptista & Andrew Burke & Simon C. Parker & Roy Thurik, 2015. "Good times, bad times: entrepreneurship and the business cycle," Working Papers 1503, Department of Applied Economics II, Universidad de Valencia.
    15. Tubadji, Annie & Nijkamp, Peter & Santarelli, Enrico, 2017. "Shacklean Uncertainty and Cultural Embeddedness as Innovation Constraints in the UK," GLO Discussion Paper Series 111, Global Labor Organization (GLO).
    16. Begoña Cueto & Gabriel Pruneda, 2017. "Job Satisfaction of Wage and Self-Employed Workers. Do Job Preferences Make a Difference?," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 12(1), pages 103-123, March.

    More about this item

    Keywords

    Entrepreneur human capital; Pre-entry capabilities; New firm survival; Opportunity-based entrepreneurship; Necessity-based entrepreneurship; L26;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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