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Do Entrepreneurs Matter?

Author

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  • Becker, Sascha O.

    (Monash University)

  • Hvide, Hans K.

    (University of Bergen)

Abstract

In the large literature on firm performance, economists have given little attention to entrepreneurs. We use deaths of more than 500 entrepreneurs as a source of exogenous variation, and ask whether this variation can explain shifts in firm performance. Using longitudinal data, we find large and sustained effects of entrepreneurs at all levels of the performance distribution. Entrepreneurs strongly affect firm growth patterns of both very young firms and for firms that have begun to mature. We do not find significant differences between small and larger firms, family and non-family firms, nor between firms located in urban and rural areas, but we do find stronger effects for founders with high human capital. Overall, the results suggest that an often overlooked factor – individual entrepreneurs – plays a large role in affecting firm performance.

Suggested Citation

  • Becker, Sascha O. & Hvide, Hans K., 2013. "Do Entrepreneurs Matter?," IZA Discussion Papers 7146, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7146
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The incentives for entrepreneurs
      by Johan Fourie in Johan Fourie's Blog on 2013-03-28 10:13:36
    2. Knowing the Who: Identifying the effect of entrepreneurs on firms
      by berodsat in NEP-HIS blog on 2013-03-27 18:36:39
    3. Knowing the Who: Identifying the effect of entrepreneurs on firms
      by berodsat in NEP-HIS blog on 2013-03-27 18:36:39

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    More about this item

    Keywords

    firm performance; entrepreneurship; human capital;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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