Human Capital and the Performance of Firms Over Time

40 Pages Posted: 23 Feb 2012

See all articles by Rui Baptista

Rui Baptista

Brunel Business School, Brunel University; Instituto Superior Tecnico, University of Lisbon

Francisco Lima

Instituto Superior Técnico (IST) - Department of Engineering and Management; Center for Management Studies (CEG-IST); Statistics Portugal

Joana Mendonça

Technical University of Lisbon (UTL)

Date Written: February 23, 2012

Abstract

We examine the impact of founders' and employees' general and specific human capital on the performance of new firms (survival and sales) over time. We find that firms founded by more educated business owners are more likely to perform better. Results also indicate that business owners with previous managerial and industry-specific experience are more likely to survive and present better sales performance. This effect persists and indeed gains relevance over time, even if the firm's owners change. While industry-specific and managerial experience are important for entrepreneurs, firm-specific human capital is more important for employees, and the acquisition of old routines and practices from previous firms does not matter so much for employee performance as it does for founders.

Keywords: entrepreneurship, founder human capital, employee human capital, firm performance

JEL Classification: M13

Suggested Citation

Baptista, Rui and Lima, Francisco and Mendonça, Joana, Human Capital and the Performance of Firms Over Time (February 23, 2012). Available at SSRN: https://ssrn.com/abstract=2009673 or http://dx.doi.org/10.2139/ssrn.2009673

Rui Baptista (Contact Author)

Brunel Business School, Brunel University ( email )

Kingston Lane
Eastern Gateway Building
Uxbridge, Middlesex UB8 3PH
United Kingdom
+44 (0)1895 265890 (Phone)

HOME PAGE: http://www.brunel.ac.uk/bbs/people/academic-and-research-staff/full-time-faculty/rui-baptista

Instituto Superior Tecnico, University of Lisbon ( email )

Dep. of Engineering Management
Av. Rovisco Pais
Lisbon, 1049-001
Portugal

HOME PAGE: http://https://fenix.ist.utl.pt/homepage/ist14021?locale=en_EN

Francisco Lima

Instituto Superior Técnico (IST) - Department of Engineering and Management ( email )

Av. Rovisco Pais
Lisbon, Lisbon 1049-001
Portugal

HOME PAGE: http://https://fenix.ist.utl.pt/homepage/ist14367

Center for Management Studies (CEG-IST) ( email )

Lisbon
Portugal

Statistics Portugal ( email )

Portugal

Joana Mendonça

Technical University of Lisbon (UTL) ( email )

R. Miguel Lupi, 20
Lisbon, 1200
Portugal

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