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Assessing the Relationship between Human Capital and Firm Performance: Evidence from Technology–Based New Ventures

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  • Rod Shrader
  • Donald S. Siegel

Abstract

We assess the role of human capital in the growth and development of new technology–based ventures, based on longitudinal data from 198 high–tech ventures. Our empirical results imply that there is a strong relationship between team experience and strategy. Although there is a weak direct link between team experience and venture performance, the findings strongly suggest that the fit between strategy and team experience is a key determinant of the long–term performance of high–tech entrepreneurial ventures. For small, technology–based new ventures, the team's technological experience appears to be the most important determinant of the success of a differentiation strategy.

Suggested Citation

  • Rod Shrader & Donald S. Siegel, 2007. "Assessing the Relationship between Human Capital and Firm Performance: Evidence from Technology–Based New Ventures," Entrepreneurship Theory and Practice, , vol. 31(6), pages 893-908, November.
    • Handle: RePEc:sae:entthe:v:31:y:2007:i:6:p:893-908
    DOI: 10.1111/j.1540-6520.2007.00206.x
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