Initial funding and founders’ human capital: An empirical analysis using multiple surveys for start-up firms

Yuji Honjo, Charee Kwak and Hirofumi Uchida

Japan and the World Economy, 2022, vol. 63, issue C

Abstract: This study explores the use of initial funding sources using a unique sample of various types of start-up firms in Japan obtained from multiple surveys. We provide evidence on the differences in the use of initial funding sources and their determinants across start-up firms by estimating a multivariate probit model. Our findings indicate that founders’ human capital, entrepreneurial commitment, growth orientation, innovativeness, physical capital, and the presence of predecessors or parent firms are important determinants of their choice of initial funding sources. Specifically, while start-up firms with growth orientation and those that engage in innovative activities are more likely to use subsidies and funds from private equity investors, those with physical capital are more likely to use bank borrowing.

Keywords: Commitment; Founder; Growth orientation; Human capital; Initial funding; Innovativeness; Multiple choice; Start-up (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:63:y:2022:i:c:s0922142522000305

DOI: 10.1016/j.japwor.2022.101145

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