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Human capital and SME growth: the mediating role of reasons to start a business

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Listed:
  • Aliaa El Shoubaki

    (Montpellier Business School)

  • Issam Laguir

    (Montpellier Business School)

  • Matthijs den Besten

    (Montpellier Business School)

Abstract

Human capital has been amply discussed in the literature as a crucial factor for the growth of small and medium-sized enterprises (SMEs). However, the factors mediating the relationship between human capital and small business growth are rarely addressed. Based on the logics of the interlock between abilities, intent and effort, and goals; mediation models; and data from 46,412 French small businesses, we find evidence that reasons to start a business mediate the relation between firm growth and SME owner-managers’ human capital (discriminating between specific and general human capital). The mediation effect is particularly important in the case of general human capital. The obvious and important implication is that without a proper assessment of the reasons to start a business, the dimensions of human capital cannot be used to their full potential to understand firm growth.

Suggested Citation

  • Aliaa El Shoubaki & Issam Laguir & Matthijs den Besten, 2020. "Human capital and SME growth: the mediating role of reasons to start a business," Small Business Economics, Springer, vol. 54(4), pages 1107-1121, April.
    • Handle: RePEc:kap:sbusec:v:54:y:2020:i:4:d:10.1007_s11187-018-0129-y
    DOI: 10.1007/s11187-018-0129-y
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