Deviating from the Benchmarks

OPEN ARCHIVE

Union Jack
Dannebrog

Deviating from the Benchmarks

Vis flere oplysninger

Titel: Deviating from the Benchmarks
Human Capital Inputs and the Survival of New Startups
Forfatter: Rocha, Vera; Van Praag, Mirjam; Carneiro, Anabela
Resume: This paper studies three related questions: To what extent otherwise similar startups employ different quantities and qualities of human capital at the moment of entry? How persistent are initial human capital choices over time? And how does deviating from human capital benchmarks influence firm survival? The analysis is based on a matched employer-employee dataset and covers about 17,500 startups in manufacturing and services. We adopt a new procedure to estimate individual benchmarks for the quantity and quality of initial human resources, acknowledging correlations between hiring decisions, founders human capital, and the ownership structure of startups (solo entrepreneurs versus entrepreneurial teams). We then study the survival implications of exogenous deviations from these benchmarks, based on spline models for survival data. Our results indicate that (especially negative) deviations from the benchmark can be substantial, are persistent over time, and hinder the survival of firms. The implications may, however, vary according to the sector and the ownership structure at entry. Given the stickiness of initial choices, wrong human capital decisions at entry turn out to be a close to irreversible matter with significant survival penalties.
URI: http://hdl.handle.net/10398/9150
Dato: 2015-06-19
Note: Paper presented at DRUID15 - The Relevance of Innovation. June 15-17, 2015, Rome, Italy

Creative Commons License This work is licensed under a Creative Commons License.

Filer Størrelse Format Vis
Rocha_Van_Praag.pdf 873.7Kb PDF Vis/Åbn Paper

Dette dokument findes i følgende samling(er)

Vis flere oplysninger