Deviating from the Benchmarks


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Deviating from the Benchmarks

Show simple item record Rocha, Vera Van Praag, Mirjam Carneiro, Anabela 2015-06-19T11:11:35Z 2015-06-19T11:11:35Z 2015-06-19
dc.description.abstract 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. en_US
dc.format.extent 30 en_US
dc.language eng en_US
dc.subject.other Human resources en_US
dc.subject.other Human capital en_US
dc.subject.other Startup conditions en_US
dc.subject.other New ventures en_US
dc.subject.other Firm survival en_US
dc.subject.other Entrepreneurs en_US
dc.subject.other Intra-industry dynamics en_US
dc.title Deviating from the Benchmarks en_US
dc.type cp en_US
dc.accessionstatus modt15jun19 soma en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Institut for Innovation og Organisationsøkonomi en_US
dc.contributor.departmentshort INO en_US
dc.contributor.departmentuk Department of Innovation and Organizational Economics en_US
dc.contributor.departmentukshort INO en_US
dc.description.notes Paper presented at DRUID15 - The Relevance of Innovation. June 15-17, 2015, Rome, Italy en_US Frederiksberg en_US
dc.publisher.year 2015 en_US
dc.title.subtitle Human Capital Inputs and the Survival of New Startups en_US

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