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The Value of Human and Social Capital Investments for the Business Performance of Startups

Author

Listed:
  • Gerrit de Wit
  • Niels Bosma
  • Roy Thurik
  • Mirjam van Praag

Abstract

We investigated the manifold posed question: To what extent does investment in human and social capital, besides the effect of 'talent', enhance entrepreneurial performance?. We distinguished between three different performance measures: survival, profits, and generated employment. On the basis of the empirical analysis of a rich Dutch longitudinal data set of firm founders, we concluded that specific investments indeed affect the three performance measures substantially and significantly. Specific attention is paid to the unobserved talent bias. Moreover, the effect of the emergence of so-called 'knowledge industries' is explored.

Suggested Citation

  • Gerrit de Wit & Niels Bosma & Roy Thurik & Mirjam van Praag, 2002. "The Value of Human and Social Capital Investments for the Business Performance of Startups," Scales Research Reports N200204, EIM Business and Policy Research.
  • Handle: RePEc:eim:papers:n200204
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    References listed on IDEAS

    as
    1. De Wit, Gerrit & Van Winden, Frans A. A. M., 1990. "An empirical analysis of self-employment in the Netherlands," Economics Letters, Elsevier, vol. 32(1), pages 97-100, January.
    2. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    3. David B. Audretsch & A. Roy Thurik, 2000. "Capitalism and democracy in the 21st Century: from the managed to the entrepreneurial economy," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 17-34.
    4. Lancaster,Tony, 1992. "The Econometric Analysis of Transition Data," Cambridge Books, Cambridge University Press, number 9780521437899, May.
    5. Orley Ashenfelter & Colm Harmon & Hessel Oosterbeek, 1999. "A Review of Estimates of the Schooling/Earnings Relationship, with Tests for Publication Bias," Working Papers 804, Princeton University, Department of Economics, Industrial Relations Section..
    6. Ashenfelter, Orley & Harmon, Colm & Oosterbeek, Hessel, 1999. "A review of estimates of the schooling/earnings relationship, with tests for publication bias," Labour Economics, Elsevier, vol. 6(4), pages 453-470, November.
    7. repec:fth:prinin:425 is not listed on IDEAS
    8. van Praag, C M & Cramer, J S, 2001. "The Roots of Entrepreneurship and Labour Demand: Individual Ability and Low Risk Aversion," Economica, London School of Economics and Political Science, vol. 68(269), pages 45-62, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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