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 sub- stantially and significantly. Specific attention is paid to the unobserved talent bias. Moreover, the effect of the emergence of so called "knowledge industries" is explored.

entrepreneurship, human capital, performance, small business, social capital, start-ups
Intertemporal Firm Choice and Growth, Investment, or Financing (jel D92), Human Capital; Skills; Occupational Choice; Labor Productivity (jel J24), New Firms; Startups (jel M13)
Tinbergen Institute Discussion Paper Series
Tinbergen Institute

Bosma, N, van Praag, M, Thurik, A.R, & de Wit, G. (2002). The Value of Human and Social Capital Investments for the Business Performance of Start-ups (No. TI 02-027/3). Tinbergen Institute Discussion Paper Series. Retrieved from http://hdl.handle.net/1765/6821