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Entrepreneurship and human capital: The role of financial development

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  • Dutta, Nabamita
  • Sobel, Russell S.

Abstract

The previous literature is filled with mixed findings with regard to human capital's impact on entrepreneurial outcomes. Using data from Global Entrepreneurship Monitor, we re-explore the human capital-entrepreneurship relationship and attempt to clarify the mixed findings. In particular, the prior literature has treated human capital's impact on entrepreneurship in isolation, while in reality its impact depends on access to financial capital. Our results show that a rise in tertiary enrollment benefits entrepreneurship most when the level of financial development is low. For higher levels of financial development, the impact of tertiary enrollment on entrepreneurship is still positive but much lesser in magnitude compared to countries with lower level of financial development.

Suggested Citation

  • Dutta, Nabamita & Sobel, Russell S., 2018. "Entrepreneurship and human capital: The role of financial development," International Review of Economics & Finance, Elsevier, vol. 57(C), pages 319-332.
    • Handle: RePEc:eee:reveco:v:57:y:2018:i:c:p:319-332
    DOI: 10.1016/j.iref.2018.01.020
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    2. Canh Phuc Nguyen & Thanh Dinh Su, 2021. "Financing the economy: The multidimensional influences of financial development on economic complexity," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(4), pages 644-684, May.
    3. Gregory, Richard P., 2019. "Financial openness and entrepreneurship," Research in International Business and Finance, Elsevier, vol. 48(C), pages 48-58.
    4. Cai Zhou & Bowen Li, 2023. "How does e‐commerce demonstration city improve urban innovation? Evidence from China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(4), pages 915-940, October.
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    More about this item

    Keywords

    Entrepreneurship; Human capital; Tertiary enrollment; Financial development; Private credit; Liquid liabilities; Bank deposits;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy

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