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Does Founders' Human Capital Matter for Innovation? Evidence from Japanese Start‐ups

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  • Masatoshi Kato
  • Hiroyuki Okamuro
  • Yuji Honjo

Abstract

Using an original questionnaire survey, this paper explores whether and how founders' human capital affects the innovation outcomes of start‐ups. We found that founders with greater human capital are more likely to yield innovation outcomes. Because certain types of human capital may boost research and development () investment, which possibly results in innovation outcomes, we estimate the determinants of innovation outcomes by an instrumental variable probit model. Our findings suggest that specific human capital for innovation, such as prior innovation experience, is directly associated with innovation outcomes, whereas generic human capital, such as educational background, indirectly affects innovation outcomes through investment.

Suggested Citation

  • Masatoshi Kato & Hiroyuki Okamuro & Yuji Honjo, 2015. "Does Founders' Human Capital Matter for Innovation? Evidence from Japanese Start‐ups," Journal of Small Business Management, Taylor & Francis Journals, vol. 53(1), pages 114-128, January.
    • Handle: RePEc:taf:ujbmxx:v:53:y:2015:i:1:p:114-128
    DOI: 10.1111/jsbm.12094
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    Cited by:

    1. Panagiotis Tsolakidis & Naoum Mylonas & Eugenia Petridou, 2020. "The Impact of Imitation Strategies, Managerial and Entrepreneurial Skills on Startups’ Entrepreneurial Innovation," Economies, MDPI, vol. 8(4), pages 1-17, October.
    2. Masatoshi Kato & Yuji Honjo, 2015. "Entrepreneurial human capital and the survival of new firms in high- and low-tech sectors," Journal of Evolutionary Economics, Springer, vol. 25(5), pages 925-957, November.
    3. Hasirumane Venkatesh Mukesh, 2022. "Digital Transformation Taking Centre Stage: How Is Digital Transformation Reshaping Entrepreneurial Innovation?," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 31(2), pages 364-401, July.
    4. Francesca Sanguineti & Antonio Majocchi & Christian Lechner, 2025. "From one to many: education, diversity, and international experience in habitual vs. one-time founders," Small Business Economics, Springer, vol. 64(4), pages 1929-1951, April.
    5. Masatoshi Kato & Koichiro Onishi & Yuji Honjo, 2017. "Does patenting always help new-firm survival?," Discussion Paper Series 159, School of Economics, Kwansei Gakuin University, revised May 2017.
    6. Lenihan, Helena & McGuirk, Helen & Murphy, Kevin R., 2019. "Driving innovation: Public policy and human capital," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    7. Müller, Bettina & Murmann, Martin, 2016. "The workforce composition of young firms and product innovation: Complementarities in the skills of founders and their early employees," ZEW Discussion Papers 16-074, ZEW - Leibniz Centre for European Economic Research.
    8. Masatoshi Kato, 2017. "Founders’ human capital and external knowledge sourcing: An absorptive capacity perspective for innovative start-ups," Discussion Paper Series 162, School of Economics, Kwansei Gakuin University, revised Jun 2017.
    9. Jaffar Abbas & Saqlain Raza & Mohammad Nurunnabi & Mohd Sobri Minai & Shaher Bano, 2019. "The Impact of Entrepreneurial Business Networks on Firms’ Performance Through a Mediating Role of Dynamic Capabilities," Sustainability, MDPI, vol. 11(11), pages 1-28, May.
    10. Protogerou, Aimilia & Caloghirou, Yannis & Vonortas, Nicholas S., 2017. "Determinants of young firms’ innovative performance: Empirical evidence from Europe," Research Policy, Elsevier, vol. 46(7), pages 1312-1326.
    11. Tao, Chenlu & Cheng, Baodong & Liao, Zhilin & Wei, Zhuoran & Chen, Fawei & Yu, Chang, 2025. "The impact of carbon emissions trading policy on green innovation of export enterprises: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 88(C), pages 1922-1938.
    12. 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).
    13. Liu, Gordon & Zhang, Stephen X. & Ko, Wai Wai & Jahanshahi, Asghar Afshar & Chen, Yantai & John, Joshin, 2025. "Causation processes and innovation strategy in small- and medium-sized firms in emerging countries: The moderating role of founder-CEOs' human capital," Technological Forecasting and Social Change, Elsevier, vol. 212(C).
    14. Fan, Xia & Li, Chuanju, 2025. "Credit-pool policy and new energy vehicle industrial innovation from the perspective of market regulation," Energy, Elsevier, vol. 322(C).
    15. Nagwan AlQershi & Zakaria Bin Abas & Sany Sanuri Mohd Mokhtar, 2019. "THE MEDIATING EFFECT OF HUMAN CAPITAL ON THE RELATIONSHIP BETWEEN STRATEGIC INNOVATION AND THE PERFORMANCE OF MANUFACTURING SMEs IN YEMEN," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 10(1).
    16. Civelek Mehmed & Rahman Ashiqur & Kozubikova Ludmila, 2016. "Entrepreneurial Orientation In The Segment Of Micro-Enterprises: Evidence From Czech Republic," International Journal of Entrepreneurial Knowledge, Center for International Scientific Research of VSO and VSPP, vol. 4(1), pages 72-89, June.
    17. Abeer Alomani & Rui Baptista & Suma S. Athreye, 2022. "The interplay between human, social and cognitive resources of nascent entrepreneurs," Small Business Economics, Springer, vol. 59(4), pages 1301-1326, December.
    18. Kato, Masatoshi & Zhou, Haibo, 2018. "Numerical labor flexibility and innovation outcomes of start-up firms: A panel data analysis," Technovation, Elsevier, vol. 69(C), pages 15-27.
    19. Masatoshi Kato, 2016. "Internal R&D and External Knowledge Acquisition of Start-up Firms: Exploring the Role of Entrepreneurial Human Capital," Discussion Paper Series 145, School of Economics, Kwansei Gakuin University, revised Jul 2016.
    20. OKAMURO, Hiroyuki & 岡室, 博之 & KATO, Masatoshi, 2015. "Determinants of Quantitative and Qualitative Employment Growth: A Comparison between R&D-oriented and Other Start-ups in Japan," CCES Discussion Paper Series 62, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
    21. Elisabeth Mueller & Lorna Syme & Thorsten Doherr, 2025. "Continuing opportunity recognition in young ventures—the role of founder and joiner experience," Small Business Economics, Springer, vol. 65(4), pages 2259-2276, December.
    22. Sergio Afcha & Abel Lucena, 2022. "R&D subsidies and firm innovation: does human capital matter?," Industry and Innovation, Taylor & Francis Journals, vol. 29(10), pages 1171-1201, November.

    More about this item

    JEL classification:

    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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