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R&D investment of start-up firms: does founders’ human capital matter?

Author

Listed:
  • Yuji Honjo
  • Masatoshi Kato
  • Hiroyuki Okamuro

Abstract

This article examines whether founders’ human capital affects not only actual investment but also required investment in research and development (R&D), using the original data of Japanese start-up firms. The estimation results indicate that higher levels of founders’ human capital, especially their education levels, increase both actual and required investment in R&D and thus do not necessarily contribute to reducing the funding gap for R&D. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Yuji Honjo & Masatoshi Kato & Hiroyuki Okamuro, 2014. "R&D investment of start-up firms: does founders’ human capital matter?," Small Business Economics, Springer, vol. 42(2), pages 207-220, February.
    • Handle: RePEc:kap:sbusec:v:42:y:2014:i:2:p:207-220
    DOI: 10.1007/s11187-013-9476-x
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    Cited by:

    1. Honjo, Yuji, 2021. "The impact of founders’ human capital on initial capital structure: Evidence from Japan," Technovation, Elsevier, vol. 100(C).
    2. Masatoshi Kato & Yuji Honjo, 2015. "Entrepreneurial human capital and the survival of new firms in high- and low-tech sectors," Journal of Evolutionary Economics, Springer, vol. 25(5), pages 925-957, November.
    3. Masatoshi Kato & Koichiro Onishi & Yuji Honjo, 2017. "Does patenting always help new-firm survival?," Discussion Paper Series 159, School of Economics, Kwansei Gakuin University, revised May 2017.
    4. Honjo, Yuji & Nagaoka, Sadao, 2018. "Initial public offering and financing of biotechnology start-ups: Evidence from Japan," Research Policy, Elsevier, vol. 47(1), pages 180-193.
    5. KATO Masatoshi & Nicolas LEGENDRE & YOSHIDA Hiroki, 2022. "Does VC Investor Type Matter? Determinants and effects of VC backing for new firms in Japan," Discussion papers 22117, Research Institute of Economy, Trade and Industry (RIETI).
    6. Masatoshi Kato, 2016. "Internal R&D and External Knowledge Acquisition of Start-up Firms: Exploring the Role of Entrepreneurial Human Capital," Discussion Paper Series 145, School of Economics, Kwansei Gakuin University, revised Jul 2016.
    7. Yuji Honjo, 2021. "Public or perish? From founding to initial public offering," Review of Managerial Science, Springer, vol. 15(6), pages 1573-1610, August.
    8. OKAMURO, Hiroyuki & SAKUMA, Yohei, 2021. "The Effects of R&D Tax Incentive Reform on R&D Expenditures: The Case of 2009 Reform in Japan," TDB-CAREE Discussion Paper Series E-2021-04, Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University.
    9. Honjo, Yuji & Kwak, Charee & Uchida, Hirofumi, 2022. "Initial funding and founders’ human capital: An empirical analysis using multiple surveys for start-up firms," Japan and the World Economy, Elsevier, vol. 63(C).
    10. Yuji Honjo & Masatoshi Kato, 2016. "Do initial financial conditions determine the fate of start-up firms?," Discussion Paper Series 139, School of Economics, Kwansei Gakuin University, revised Jan 2016.
    11. Chong Yu & Masatoshi Kato, 2024. "Does user entrepreneurship matter for start-up financing? Evidence from Japan," Discussion Paper Series 275, School of Economics, Kwansei Gakuin University.
    12. Sá, Elisabete S. & Pinho, José Carlos M.R. de, 2019. "Effect of entrepreneurial framework conditions on R&D transfer to new and growing firms: The case of European Union innovation-driven countries," Technological Forecasting and Social Change, Elsevier, vol. 141(C), pages 47-58.
    13. Masatoshi Kato, 2017. "Founders’ human capital and external knowledge sourcing: An absorptive capacity perspective for innovative start-ups," Discussion Paper Series 162, School of Economics, Kwansei Gakuin University, revised Jun 2017.
    14. Schulte, Reinhard, 2015. "On real investment by new ventures," Lüneburger Beiträge zur Gründungsforschung 12, Leuphana University of Lüneburg, Department of Entrepreneurship & Start-up Management.
    15. Masatoshi Kato & Yuji Honjo, 2020. "CEO Succession and New-Firm Performance: Does Successor Origin Matter?," Discussion Paper Series 213, School of Economics, Kwansei Gakuin University.
    16. Claudia Cantabene & Iacopo Grassi, 2020. "R&D cooperation in SMEs: the direct effect and the moderating role of human capital," Applied Economics, Taylor & Francis Journals, vol. 52(28), pages 3090-3105, June.
    17. Oscarina Conceição & Ana Paula Faria, 2014. "Determinants of research-based spin-offs survival," NIPE Working Papers 21/2014, NIPE - Universidade do Minho.
    18. Faisal Khurshid & Woo‐Yong Park & Felix T. S. Chan, 2020. "The impact of competition on vertical integration: The role of technological niche width," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 789-800, March.
    19. Felipe Rojas & Elena Huergo, 2016. "Characteristics of entrepreneurs and public support for NTBFs," Small Business Economics, Springer, vol. 47(2), pages 363-382, August.
    20. Kato, Masatoshi & Zhou, Haibo, 2018. "Numerical labor flexibility and innovation outcomes of start-up firms: A panel data analysis," Technovation, Elsevier, vol. 69(C), pages 15-27.
    21. Li Li & Jean Chen & Hongli Gao & Li Xie, 2019. "The certification effect of government R&D subsidies on innovative entrepreneurial firms’ access to bank finance: evidence from China," Small Business Economics, Springer, vol. 52(1), pages 241-259, January.
    22. Kamguia, Brice & Keneck-Massil, Joseph & Nvuh-Njoya, Youssouf & Tadadjeu, Sosson, 2022. "Natural resources and innovation: Is the R&D sector cursed too?," Resources Policy, Elsevier, vol. 77(C).

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    More about this item

    Keywords

    Founder; Funding gap; Human capital; R&D; Start-up; G30; M13; O32; L26;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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