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Effects of Human Capital and Long–Term Human Resources Development and Utilization on Employment Growth of Small–Scale Businesses: A Causal Analysis1

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  • Andreas Rauch
  • Michael Frese
  • Andreas Utsch

Abstract

The purpose of this study was to explore how three different human resource variables affect employment growth of small–scale enterprises: human capital of business owners, human capital of employees, and human resource development and utilization. The literature suggests different models of how these human resource variables affect business outcomes. Longitudinal data from 119 German business owners provided support for a main effect model indicating that owners’ human capital as well as employee human resource development and utilization affect employment growth. Moreover, human resources development and utilization was most effective when the human capital of employees was high. We conclude that human resources are important factors predicting growth of small–scale enterprises.

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  • Andreas Rauch & Michael Frese & Andreas Utsch, 2005. "Effects of Human Capital and Long–Term Human Resources Development and Utilization on Employment Growth of Small–Scale Businesses: A Causal Analysis1," Entrepreneurship Theory and Practice, , vol. 29(6), pages 681-698, November.
    • Handle: RePEc:sae:entthe:v:29:y:2005:i:6:p:681-698
    DOI: 10.1111/j.1540-6520.2005.00103.x
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    References listed on IDEAS

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    5. Robert L. Heneman & Judith W. Tansky & S. Michael Camp, 2000. "Human Resource Management Practices in Small and Medium-Sized Enterprises: Unanswered Questions and Future Research Perspectives," Entrepreneurship Theory and Practice, , vol. 25(1), pages 11-26, October.
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    Cited by:

    1. Wei, Shihao & Su, Zhongfeng & Ahlstrom, David & Wu, Zhan, 2023. "State fragility and informal entrepreneurship: The moderating effects of human capital under varying temporal orientations," Journal of International Management, Elsevier, vol. 29(1).
    2. Coad, Alex & Daunfeldt, Sven-Olov & Johansson, Dan & Wennberg, Karl, 2011. "Who do High-growth Firms Employ, and Who do they Hire?," Ratio Working Papers 169, The Ratio Institute.
    3. Jung, Jin Hwa & Lim, Dong-Geon, 2020. "Industrial robots, employment growth, and labor cost: A simultaneous equation analysis," Technological Forecasting and Social Change, Elsevier, vol. 159(C).
    4. Giovanni Radaelli & Claudio Dell’Era & Federico Frattini & Antonio Messeni Petruzzelli, 2018. "Entrepreneurship and Human Capital in Professional Sport: A Longitudinal Analysis of the Italian Soccer League," Entrepreneurship Theory and Practice, , vol. 42(1), pages 70-93, January.
    5. Barbara Bird & Leon Schjoedt & J. Robert Baum, 2012. "Editor's Introduction. Entrepreneurs’ Behavior: Elucidation and Measurement," Entrepreneurship Theory and Practice, , vol. 36(5), pages 889-913, September.
    6. Naor, Rina & Nabarro, Ron & Isaacson, Michal, 2021. "Entrepreneurs’ views of the gerontech market," Technology in Society, Elsevier, vol. 67(C).

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