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Do entrepreneurs matter?

  • Becker, Sascha O.

    (CAGE @ Warwick University ; CEPR ; CESifo ; Ifo and IZA)

  • Hvide, Hans K.

    (University of Bergen ; CEPR and University of Aberdeen)

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 en- trepreneurs 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 signficant 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. JEL classification: D21 ; D24 ; J23 ; L11 ; L25 ; G39

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File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/2013/twerp_1002.pdf
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Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 1002.

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Date of creation: 2013
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Handle: RePEc:wrk:warwec:1002
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