The impact of human capital on the early success of necessity versus opportunity-based entrepreneurs

This paper examines whether founders' backgrounds influence new firm survival in the early years after startup, focusing, in particular, on the impact of unemployment-driven entrepreneurship. For entrepreneurs who left their previous employment to found a new firm, both general and specific hum...

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Bibliographic Details
Published in:Small business economics 2014-04, Vol.42 (4), p.831-847
Main Authors: Baptista, Rui, Karaöz, Murat, Mendonça, Joana
Format: Article
Language:English
Subjects:
Business and Management
Business ownership
Business structures
Correlation analysis
Ecologists
Econometrics
Effects
Employment
Enterprises
Entrepreneurs
Entrepreneurship
Formal education
Human capital
Hypotheses
Industrial market
Industrial Organization
Industry
Knowledge
Management
Microeconomics
Start up firms
Startups
Success
Survival
Unemployment
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Summary:This paper examines whether founders' backgrounds influence new firm survival in the early years after startup, focusing, in particular, on the impact of unemployment-driven entrepreneurship. For entrepreneurs who left their previous employment to found a new firm, both general and specific human capital play a key role in enhancing early survival chances. However, various forms of human capital have little effect on early survival of unemploymentdriven entrepreneurs, who rely mostly on previous entrepreneurial experience to persevere. Results suggest that pre-entry capabilities play an important role in the early success of opportunity-based entrepreneurs, but have little influence on the early success of necessity-based ones.
ISSN:0921-898X
1573-0913
DOI:10.1007/s11187-013-9502-z