What Skills Lead to Entrepreneurial Success? Evidence from Non-Farm-Household Enterprises in Indonesia

Posted: 27 Jun 2019

See all articles by Niken Kusumawardhani

Niken Kusumawardhani

Independent

Daniel Suryadarma

Australian National University (ANU) - Arndt-Corden Department of Economics; SMERU Research Institute

Luca Tiberti

Université Laval

Veto Tyas Indrio

Independent

Date Written: June 26, 2019

Abstract

The abundance of small enterprises in developing countries has led to debates regarding the role that of entrepreneurial skill in business performance. Analyses of the skills and characteristics important for success can inform entrepreneurship training programs or educational curricula designed to increase the number of successful entrepreneurs. We addressed these issues in the context of Indonesia, a low-middle-income country in which almost half of workers are self-employed. After developing a conceptual framework linking fluid intelligence, crystallized intelligence, and educational attainment, we estimated the effect of these different types of intelligence on the profit and value of non-farm-household businesses. We found that fluid intelligence had sizeable and positive returns on business. On the other hand, crystallized intelligence had a positive and large effect only in sectors that required intense concentration or computers. Some heterogeneous effects regarding business size were also found. Our results were robust when we controlled for possible selection into non-farm entrepreneurship.

Keywords: cognitive skills, human capital, entrepreneurship, household firm, farm business, non-farm business

JEL Classification: J24, J46, O15, L26

Suggested Citation

Kusumawardhani, Niken and Suryadarma, Daniel and Tiberti, Luca and Indrio, Veto Tyas, What Skills Lead to Entrepreneurial Success? Evidence from Non-Farm-Household Enterprises in Indonesia (June 26, 2019). Partnership for Economic Policy Working Paper No. 2019-14. Available at SSRN: https://ssrn.com/abstract=3410602

Niken Kusumawardhani (Contact Author)

Independent ( email )

No Address Available

Daniel Suryadarma

Australian National University (ANU) - Arndt-Corden Department of Economics ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

SMERU Research Institute ( email )

Jl. Pandeglang No. 30
Jakarta, 10310
Indonesia
62 21 31936336 (Phone)
62 21 31930850 (Fax)

HOME PAGE: http://www.smeru.or.id

Luca Tiberti

Université Laval ( email )

2214 Pavillon J-A. DeSeve
Quebec, Quebec G1K 7P4
Canada

Veto Tyas Indrio

Independent ( email )

No Address Available

Register to save articles to
your library

Register

Paper statistics

Abstract Views
54
PlumX Metrics