Entrepreneur Death and Startup Performance
50 Pages Posted: 12 Jan 2013 Last revised: 17 Dec 2020
Date Written: August 20, 2019
How large is entrepreneurs' personal importance to startups? We use the death of nearly 1,500 entrepreneurs as a source of variation, and find large and sustained negative effects on growth and profitability. For small startups, the effects go mainly via firm survival, while for larger startups the effects are mainly on firm growth. For larger startups, the mean effect on sales is about 50 percent. The effects appear to be driven by entrepreneur specialness rather than leadership transition; the effects of death of entrepreneur-managers is economically and statistically stronger than the death of managers that are not entrepreneurs.
Keywords: entrepreneurship, firm performance, human capital
JEL Classification: D21, D24, J23, L11, L25, G39
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