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Do Entrepreneurs Matter?

Author

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  • Becker, Sascha O.

    () (University of Warwick)

  • Hvide, Hans K.

    () (University of Bergen)

Abstract

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, the results suggest that an often overlooked factor – individual entrepreneurs – plays a large role in affecting firm performance.

Suggested Citation

  • Becker, Sascha O. & Hvide, Hans K., 2013. "Do Entrepreneurs Matter?," IZA Discussion Papers 7146, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7146
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Knowing the Who: Identifying the effect of entrepreneurs on firms
      by berodsat in NEP-HIS blog on 2013-03-27 18:36:39

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    Cited by:

    1. Liberini, Federica & Redoano, Michela & Proto, Eugenio, 2017. "Happy voters," Journal of Public Economics, Elsevier, vol. 146(C), pages 41-57.
    2. repec:eee:socmed:v:183:y:2017:i:c:p:116-125 is not listed on IDEAS
    3. Fiala, Nathan., 2015. "Access to finance and enterprise growth : evidence from an experiment in Uganda," ILO Working Papers 994874063402676, International Labour Organization.
    4. repec:eee:respol:v:47:y:2018:i:7:p:1344-1365 is not listed on IDEAS
    5. Henrekson, Magnus & Sanandaji, Tino, 2013. "Small Business Activity Does not Measure Entrepreneurship," Working Paper Series 959, Research Institute of Industrial Economics, revised 26 Jan 2014.
    6. Fiala, Nathan, 2014. "Economic Consequences of Forced Displacement," Working Papers 29, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    7. Lyk-Jensen, Stéphanie Vincent & Weatherall, Cecilie Dohlmann & Jepsen, Peter Winning, 2016. "The effect of military deployment on mental health," Economics & Human Biology, Elsevier, vol. 23(C), pages 193-208.

    More about this item

    Keywords

    entrepreneurship; firm performance; human capital;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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