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Do Entrepreneurs Matter?

44 Pages Posted: 6 Feb 2013  

Sascha O. Becker

University of Warwick; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics; Ifo Institute for Economic Research

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)

Multiple version iconThere are 4 versions of this paper

Date Written: January 31, 2013

Abstract

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 entrepreneurs 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 significant 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.

Keywords: entrepreneurship, firm performance, human capital

JEL Classification: D210, D240, J230, L110, L250, G390

Suggested Citation

Becker, Sascha O. and Hvide, Hans K., Do Entrepreneurs Matter? (January 31, 2013). CESifo Working Paper Series No. 4088. Available at SSRN: https://ssrn.com/abstract=2212056

Sascha O. Becker (Contact Author)

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://sobecker.de

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Ifo Institute for Economic Research

Munich
Germany

Hans Hvide

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen
Norway

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

HOME PAGE: http://hans.hvide.googlepages.com/

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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