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Do entrepreneurs matter?

  • Becker, Sascha

    (University of Warwick)

  • Hvide, Hans V

    (University of Bergen)

In the large literature on firm performance, economists have given little attention to entrepreneurs. We use deaths of more than 500 entrepreneurs as a source of exogenous variation, and ask whether this variation can explain shifts in firm performance. Using longitudinal data, we find large and sustained effects of entrepreneurs at all levels of the performance distribution. Entrepreneurs strongly affect firm growth patterns of both very young firms and for firms that have begun to mature. We do not find significant differences between small and larger firms, family and non-family firms, nor between firms located in urban and rural areas, but we do find stronger effects for founders with high human capital. Overall, theresults suggest that an often overlooked factor –individual entrepreneurs –plays a large role in affecting firm performance.

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File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/109.2013_becker.pdf
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Paper provided by Competitive Advantage in the Global Economy (CAGE) in its series CAGE Online Working Paper Series with number 109.

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Date of creation: 2013
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Handle: RePEc:cge:wacage:109
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