Business owners, employees, and firm performance

Mika Maliranta and Satu Nurmi ()
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Satu Nurmi: Statistics Finland & The Research Institute of the Finnish Economy ETLA

Small Business Economics, 2019, vol. 52, issue 1, No 7, 129 pages

Abstract: Abstract The novel Finnish Longitudinal OWNer-Employer-Employee (FLOWN) database was used to analyze how the characteristics of owners and employees relate to firm performance as determined by labor productivity, survival, and employment growth. Focusing on the role of the employment history, the results show that previous experience in a high-productivity firm strongly predicts high productivity and probability of survival for the entrepreneur’s new firm. This can be interpreted as evidence of knowledge spillovers through labor mobility of both the owners and the employees. The results also show that the owner’s high education in a technical field is positively related to firm performance. Different findings for owner-entrepreneurs and pure owners suggest that the definition of entrepreneurship matters.

Keywords: Entrepreneurship; Ownership; Firm performance; Human capital; Diffusion of knowledge; L25; L26; J24; J62; O33 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (6)

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Working Paper: Business Owners, Employees and Firm Performance (2016)
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DOI: 10.1007/s11187-018-0029-1

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