Do More Highly Educated Entrepreneurs Matter?

13 Pages Posted: 20 Nov 2013

See all articles by Faqin Lin

Faqin Lin

Central University of Finance and Economics (CUFE) - School of Economics

Can Huang

Universidade de Aveiro - Departamento de Economia

Xiaobo He

School of Business, Shanghai University of International Business and Economics; University of Adelaide - Global Food Studies

Chao Zhang

University of International Business and Economics (UIBE) - School of International Trade and Economics

Date Written: November 2013

Abstract

This paper uses a unique micro dataset of Chinese private firms surveyed in 2000 to investigate whether having a more highly educated entrepreneur affects a firm's performance. Identifying educational effects has been shown to be empirically challenging because it is difficult to overcome the likely omitted variable bias problem. We use the propensity score matching method to get around this identification problem. Matching results imply that on average, the firms whose owners received higher education had 5.2–5.8 percentage points higher return on equity, 115–126 percentage points higher profits, and 102–111 percentage points higher sales revenue, respectively, than firms that did not have higher educated entrepreneurs.

Suggested Citation

Lin, Faqin and Huang, Can and He, Xiaobo and Zhang, Chao, Do More Highly Educated Entrepreneurs Matter? (November 2013). Asian‐Pacific Economic Literature, Vol. 27, Issue 2, pp. 104-116, 2013, Available at SSRN: https://ssrn.com/abstract=2357140 or http://dx.doi.org/10.1111/apel.12023

Faqin Lin (Contact Author)

Central University of Finance and Economics (CUFE) - School of Economics ( email )

Beijing
China

Can Huang

Universidade de Aveiro - Departamento de Economia ( email )

Rua Associação Humanitária Bombeiros de Aveiro
Aveiro, 3800
Portugal

Xiaobo He

School of Business, Shanghai University of International Business and Economics ( email )

No. 1900, Wenxiang Road
Shanghai, 201620
China

University of Adelaide - Global Food Studies ( email )

10 Pulteney Street
Adelaide, South Australia 5005
Australia

Chao Zhang

University of International Business and Economics (UIBE) - School of International Trade and Economics ( email )

10 East Huixin Street
Chaouang District
Beijing, 100029
China

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