The Quality of Entrepreneurs

39 Pages Posted: 24 May 2004 Last revised: 3 Nov 2014

See all articles by Hans K. Hvide

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 2 versions of this paper

Date Written: August 5, 2007

Abstract

What determines the quality of entrepreneurs? To address this question, the paper proposes a simple model of the interaction between individual workers' decision to become entrepreneurs and established firms' effort to keep their best workers and ideas. The main prediction from the model is that larger firms produce entrepreneurs of higher quality than smaller firms. I also find that, making firm size endogenous, stronger property rights protection makes the optimal firm size larger. Using novel and unique Norwegian data, I obtain results that are consistent with previous employer size exerting a noticeable influence on entrepreneurial performance. For example, increasing previous employer size from the 25 percent quartile to the 75 percent quartile increases yearly profitability on assets by 6 percentage points.

Keywords: Entrepreneurship, Innovation, IPP, Patents, Private benefits, Property Rights, Spin-offs, Start-ups

JEL Classification: D00

Suggested Citation

Hvide, Hans, The Quality of Entrepreneurs (August 5, 2007). Available at SSRN: https://ssrn.com/abstract=545144 or http://dx.doi.org/10.2139/ssrn.545144

Hans Hvide (Contact Author)

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen, 5007
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)

London
United Kingdom

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

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

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