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Entrepreneurial Human Capital and Firm Dynamics

Author

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  • Francisco Queiró

Abstract

This article shows that entrepreneurial human capital is a key driver of firm dynamics using administrative panel data on the universe of firms and workers in Portugal. Firms started by more educated entrepreneurs are larger at entry and exhibit higher life cycle growth. Consistent with an effect on growth, the thickness of the right tail of the size distribution increases with entrepreneur schooling. The evidence points to several underlying mechanisms, with technology adoption playing the most important part. I develop and estimate a model of firm dynamics that can parsimoniously account for these findings and use it to draw aggregate implications. Accounting for the effect of entrepreneurial human capital on firm dynamics can substantially increase aggregate returns to schooling and the fraction of cross-country income differences explained by human and physical capital.

Suggested Citation

  • Francisco Queiró, 2022. "Entrepreneurial Human Capital and Firm Dynamics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 89(4), pages 2061-2100.
    • Handle: RePEc:oup:restud:v:89:y:2022:i:4:p:2061-2100.
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    File URL: http://hdl.handle.net/10.1093/restud/rdab070
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    Cited by:

    1. A. Baltrunaite & S. Formai & A. Linarello & S. Mocetti, 2024. "Ownership, Governance, Management and Firm Performance: Evidence from Italian Firms," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 10(3), pages 993-1027, November.
    2. Ferreira, Miguel & Adelino, Manuel & Fagandini, Paulo & Queiro, Francisco, 2020. "How Do Firms Respond to Demand Shocks? Evidence from the European Sovereign Debt Crisis," CEPR Discussion Papers 14640, C.E.P.R. Discussion Papers.
    3. Anna Valero, 2021. "Education and economic growth," CEP Discussion Papers dp1764, Centre for Economic Performance, LSE.
    4. Attila Gyetvai & Nasir Hossein Dad & Nicholas Kozeniauskas & Eugene Tan, 2024. "Human Capital and Entrepreneurship," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    5. Jarkko Harju & Toni Juuti & Tuomas Matikka, 2025. "Selection into Entrepreneurship, Income Mobility and Firm Performance," Working Papers 41, Finnish Centre of Excellence in Tax Systems Research.
    6. Rafael Munoz Moreno & Leonardo Iacovone & Eduardo Olaberria & Mariana De La Paz Pereira Lopez, 2022. "Productivity Growth in Mexico," World Bank Publications - Reports 37190, The World Bank Group.
    7. repec:ptu:bdpart:e202406 is not listed on IDEAS
    8. Quignon, Aurelien, 2023. "Crowd-based feedback and early-stage entrepreneurial performance: Evidence from a digital platform," Research Policy, Elsevier, vol. 52(7).
    9. Anna Valero, 2021. "Education and management practices," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 37(2), pages 302-322.
    10. Jarkko Harju & Toni Juuti & Tuomas Matikka, 2023. "Stairway to Heaven? Selection into Entrepreneurship, Income Mobility and Firm Performance," Working Papers 17, Finnish Centre of Excellence in Tax Systems Research.
    11. Catherine Laffineur & Maria Minniti & Benjamin Montmartin, 2023. "Does Knowledge in Management Foster Firm Creation and Performance?," GREDEG Working Papers 2023-19, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    12. Sivropoulos-Valero, Anna Valero, 2021. "Education and management practices," LSE Research Online Documents on Economics 114436, London School of Economics and Political Science, LSE Library.
    13. Liu, Yu & Wang, Hong & Pang, Bo & Zhao, Shiyong, 2024. "Capital investment, digital economy and innovation of high-tech industries," International Review of Financial Analysis, Elsevier, vol. 96(PB).

    More about this item

    Keywords

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    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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