Article,
Employees? entrepreneurial human capital and firm performance
Affiliations
- [1] Blekinge Inst Technol, Econ, S-37179 Karlskrona, Sweden [NORA names: Sweden; Europe, EU; Nordic; OECD];
- [2] KTH Royal Inst Technol, Dept Ind Econ & Management, INDEK, Entrepreneurship & Int Business, SE-10044 Stockholm, Sweden [NORA names: Sweden; Europe, EU; Nordic; OECD];
- [3] Swedish Entrepreneurship Forum, Saltmatargatan 9, SE-11359 Stockholm, Sweden [NORA names: Sweden; Europe, EU; Nordic; OECD];
- [4] Copenhagen Business Sch, Dept Strategy & Innovat, DK-2000 Frederiksberg, Denmark [NORA names: CBS Copenhagen Business School; University; Denmark; Europe, EU; Nordic; OECD];
- [5] Jonkoping Int Business Sch, Ctr Entrepreneurship & Spatial Econ CEnSe, POB 1026, SE-55111 Jonkoping, Sweden [NORA names: Sweden; Europe, EU; Nordic; OECD]
Abstract
We introduce a new measure of human capital, defined as employees' former involvement in entrepreneurship. Such entrepreneurial human capital (EHC) complements traditional human capital measures accumulated through work experience and education. Using detailed longitudinal register data, we track the previous years of entrepreneurial experience for the population of employees in Swedish private sector firms. We provide evidence that higher EHC among employees is associated with significantly higher levels of firm productivity. The baseline result implies that a 10 % increase in employees being former entrepreneurs increases firm-level productivity by 3.9 %. Additionally, we provide evidence that heterogeneity in employees' previous entrepreneurial experience (e.g., the reason for entering and exiting entrepreneurship, type of venture, length of entrepreneurial experi-ences, and relatedness of technology) influences the impact of EHC on productivity. The results are shown to be robust to various estimation techniques, alternative definitions of EHC, and other performance measures.