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Education and entrepreneurial success

Author

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  • Ivar Kolstad
  • Arne Wiig

Abstract

This paper estimates the effect of education on the success of entrepreneurial activity, using survey data from Malawi. An instrument variable approach is used to address the endogeneity of education. We find a significant and substantial effect of an added year of primary education on entrepreneurial profitability. This is consistent with theoretical arguments that primary schooling provides a generalised form of competence that underpins the variety of skills an entrepreneur needs to succeed in business. Results are robust to non-random selection into entrepreneurship. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Ivar Kolstad & Arne Wiig, 2015. "Education and entrepreneurial success," Small Business Economics, Springer, vol. 44(4), pages 783-796, April.
    • Handle: RePEc:kap:sbusec:v:44:y:2015:i:4:p:783-796
    DOI: 10.1007/s11187-014-9621-1
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    References listed on IDEAS

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    More about this item

    Keywords

    Entrepreneurship; Returns to schooling; Endogeneity; Malawi; L26; J24; C30;
    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
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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