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Does Founders’ Human Capital Matter for Innovation? Evidence from Japanese Start-ups

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  • Kato, Masatoshi
  • Okamuro, Hiroyuki
  • Honjo, Yuji

Abstract

Using a sample from an original questionnaire survey in Japan, this paper explores whether and how founders’ human capital affects innovation outcomes by start-ups. The results provide evidence that founders with greater human capital are more likely to yield innovation outcome. However, because certain types of founders’ human capital may boost R&D investment, which possibly results in innovation outcomes, we estimate the determinants of innovation outcomes by an instrumental variable probit model taking into account the endogeneity of R&D investment. Our findings suggest that specific human capital for innovation, such as founders’ prior innovation experience, is directly associated with innovation outcomes after start-up, while generic human capital, such as founders’ educational background, indirectly affects innovation outcomes through R&D investment.

Suggested Citation

  • Kato, Masatoshi & Okamuro, Hiroyuki & Honjo, Yuji, 2011. "Does Founders’ Human Capital Matter for Innovation? Evidence from Japanese Start-ups," CEI Working Paper Series 2011-11, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hitcei:2011-11
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    Cited by:

    1. Müller, Bettina & Murmann, Martin, 2016. "The workforce composition of young firms and product innovation: Complementarities in the skills of founders and their early employees," ZEW Discussion Papers 16-074, ZEW - Leibniz Centre for European Economic Research.
    2. 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.
    3. Jaffar Abbas & Saqlain Raza & Mohammad Nurunnabi & Mohd Sobri Minai & Shaher Bano, 2019. "The Impact of Entrepreneurial Business Networks on Firms’ Performance Through a Mediating Role of Dynamic Capabilities," Sustainability, MDPI, vol. 11(11), pages 1-28, May.
    4. Protogerou, Aimilia & Caloghirou, Yannis & Vonortas, Nicholas S., 2017. "Determinants of young firms’ innovative performance: Empirical evidence from Europe," Research Policy, Elsevier, vol. 46(7), pages 1312-1326.
    5. Panagiotis Tsolakidis & Naoum Mylonas & Eugenia Petridou, 2020. "The Impact of Imitation Strategies, Managerial and Entrepreneurial Skills on Startups’ Entrepreneurial Innovation," Economies, MDPI, vol. 8(4), pages 1-17, October.
    6. 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.
    7. Nagwan AlQershi & Zakaria Bin Abas & Sany Sanuri Mohd Mokhtar, 2019. "THE MEDIATING EFFECT OF HUMAN CAPITAL ON THE RELATIONSHIP BETWEEN STRATEGIC INNOVATION AND THE PERFORMANCE OF MANUFACTURING SMEs IN YEMEN," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 10(1).
    8. Civelek Mehmed & Rahman Ashiqur & Kozubikova Ludmila, 2016. "Entrepreneurial Orientation In The Segment Of Micro-Enterprises: Evidence From Czech Republic," International Journal of Entrepreneurial Knowledge, Center for International Scientific Research of VSO and VSPP, vol. 4(1), pages 72-89, June.
    9. Abeer Alomani & Rui Baptista & Suma S. Athreye, 2022. "The interplay between human, social and cognitive resources of nascent entrepreneurs," Small Business Economics, Springer, vol. 59(4), pages 1301-1326, December.
    10. 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.
    11. 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.
    12. 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.
    13. OKAMURO, Hiroyuki & 岡室, 博之 & KATO, Masatoshi, 2015. "Determinants of Quantitative and Qualitative Employment Growth: A Comparison between R&D-oriented and Other Start-ups in Japan," CCES Discussion Paper Series 62, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
    14. Lenihan, Helena & McGuirk, Helen & Murphy, Kevin R., 2019. "Driving innovation: Public policy and human capital," Research Policy, Elsevier, vol. 48(9), pages 1-1.

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    More about this item

    Keywords

    Start-up; Founder; Human capital; Innovations; R&D investment;
    All these keywords.

    JEL classification:

    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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