The Quality of Entrepreneurs

Author: Hvide, Hans K.

Source: The Economic Journal, Volume 119, Number 539, July 2009 , pp. 1010-1035(26)

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Abstract:

What determines the quality of entrepreneurs? The article proposes a model of the interaction between individual workers' decision to become entrepreneurs and employers' efforts to keep their best workers and ideas. The main prediction from the model is that larger firms produce entrepreneurs of higher quality than smaller firms. Using novel and unique Norwegian data, I find that previous employer size exerts a significant influence on entrepreneurial performance. For example, increasing previous employer size from the 25 percentile to the 75 percentile increases yearly profitability on assets by 6 percentage points.

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1468-0297.2009.02257.x

Affiliations: 1: University of Aberdeen CEPR and the Norwegian School of Economics and Business

Publication date: 2009-07-01