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The Value of Human and Social Capital Investments for the Business Performance of Start-ups

Author

Listed:
  • Niels Bosma

    (EIM Business and Policy Research, Zoetermeer)

  • Mirjam van Praag

    (Faculty of Economics and Econometrics, University of Amsterdam)

  • Roy Thurik

    (CASBEC, Faculty of Economics, Erasmus University Rotterdam, and EIM Business and Policy Research, Zoetermeer)

  • Gerrit de Wit

    (EIM Business and Policy Research, Zoetermeer)

Abstract

We investigate the manifold posed question: To what extent does investment in human and social capital, besides the effect of talent, enhance entrepreneurial performance? We distinguish between three different performance measures: survival, profits, and generated employment. On the basis of the empirical analysis of a rich Dutch longitudinal data set of firm founders, we conclude that specific investments indeed affect the three performance measures substantially and significantly. Specific attention is paid to the unobserved talent bias. Moreover, the effect of the emergence of so called "knowledge industries" is explored. This discussion paper has resulted in a publication in Small Business Economics , 2004, 23(3), 227-36.

Suggested Citation

  • Niels Bosma & Mirjam van Praag & Roy Thurik & Gerrit de Wit, 2002. "The Value of Human and Social Capital Investments for the Business Performance of Start-ups," Tinbergen Institute Discussion Papers 02-027/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20020027
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    References listed on IDEAS

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    1. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
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    More about this item

    Keywords

    entrepreneurship; human capital; social capital; small business; start-ups; performance;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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