Entrepreneur Death and Startup Performance

Becker, Sascha O.; Hvide, Hans K.

doi:10.2139/ssrn.2199645

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Entrepreneur Death and Startup Performance

50 Pages Posted: 12 Jan 2013 Last revised: 17 Dec 2020

See all articles by Sascha O. Becker

Sascha O. Becker

Monash University - Department of Economics; University of Warwick

Hans K. Hvide

University of Bergen - Department of Economics; University of Aberdeen - Business School; Centre for Economic Policy Research (CEPR); Institute for the Study of Labor (IZA)

There are 4 versions of this paper

Date Written: August 20, 2019

Abstract

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

Suggested Citation: Suggested Citation

Becker, Sascha O. and Hvide, Hans, Entrepreneur Death and Startup Performance (August 20, 2019). Available at SSRN: https://ssrn.com/abstract=2199645 or http://dx.doi.org/10.2139/ssrn.2199645